Movie Downloads May Provide Ad Revenue Stream

In the past month, 15% of online Americans downloaded a full-length movie from the Internet, according to a study released by Solutions Research Group (SRG). Analysts say the increase from 11% just seven months ago points to Americans' growing comfort with using the computer to download long-form video--and highlights a possible opportunity for advertisers.

"The consumer has come to expect on-demand, premium content on whichever platform they have access to and in some cases like VOD, they're willing to pay for it," said Kaan Yigit, study director, SRG. "In others, they're interested in getting it for free or at a discount, and that opens up a window for sponsorship."

Indeed, some 67% of consumers surveyed expect to download movies at a discount from retail DVD prices. So while users accessing long-form video on the Web--through legally licensed sites such as walmart.com and movielink.com--typically pay up front, an opportunity exists for brands to leverage the practice's growing popularity through ads that lower user costs.

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A toy company, for example, could sponsor free downloads of a new animated movie for a month, while an auto manufacturer could serve a pre-roll ad in the latest racing film as part of a special discounted release. While brand sponsorship of movie downloads may not become widespread, online movie distributors may turn to this form of advertising as a way to steer users away from illegal peer-to-peer sites.

Some analysts, however, don't foresee a sea change in long-form video sponsorship. "I think it will be very rare to have that kind of long-form video be ad-supported industry-wide," said David Hallerman, senior analyst, eMarketer. "But it will be interesting to see what other options develop as more people gravitate toward watching movies online."

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