As AccuStream iMedia Research reported that revenues from subscription streaming and downloading of audio and video will rise 39% this year, to $2.6 billion, Netflix said that 5 million of its movies
and TV episodes have been viewed online since it began offering "instant watching" options as part of its rental packages in January.
According to AccuStream, movies will account
for 2.2% of all media streaming and downloading revenues this year, reaching $60 million--a 133.4% increase over 2006. And the category is on track to break $100 million in 2008.
Netflix wasn't
included in the AccuStream forecasts, since "instant watching" titles are not yet sold separately from the regular DVD packages, noted Paul Palumbo, research director, AccuStream.
In any case,
Palumbo noted that Web video will follow audio's lead and become primarily a buyers'--not a rental--market. The key factors, he pointed out, are portability, price and library size.
Netflix now
offers "instant watching" options for 2,000 of its 80,000-title library, or 2.5%, with a goal of 5,000 by the end of the year. The most popular titles viewed by its subscribers on PCs so far have
included "The Matrix," "Super Size Me," "Jackass: The Movie," "Sherrybaby" and the U.S. TV series "The Office."
One stand-alone service--Real Networks' SuperPass, which offers videos, movies,
games and more--stood out in the AccuStream research, with a projected 4.1% share of the total 2007 streaming/downloading revenues. Outside of SuperPass, TV shows and other entertainment will comprise
3.4%, movies 2.2%, and news at 1.2%.
Music and movies will be up 48.5% and 133.4% respectively from 2006, but the news segment is forecast to dip slightly, due to CNN Video's switch from a
subscription-model to an ad-supported one. And with such sports as NASCAR and the PGA Tour leaving subscription models, the sports category will only rise 2.2%, due largely to the continued popularity
of Major League Baseball.
While ad-supported programming has the ability to generate more revenues than subscription channels, Palumbo said there will always be a place for premium product,
including TV shows from HBO, Showtime and Starz.
Then, Palumbo added, there are people who may not want to watch shows like "Lost" and "24" broken up into ad-supported segments, and instead
choose to pay for an uninterrupted download that skips the ads. Or conversely, perhaps people might choose to watch ads in order to get media or free. Indeed, a study released yesterday by digital
media distributor Intent MediaWorks found that seven out of 10 U.S. Internet users (74%) would be receptive to viewing ads during downloading in exchange for free or discounted music, video or games.
The study, conducted by InfoSurv, also found that 84% of respondents would have a more positive opinion of advertisers that offer such free downloads in exchange for viewing ads. And 63% would be
willing to provide personal information, such as age, gender and ZIP-code--in order to receive free downloads.
The survey, conducted in May, questioned 1,000 16- to-40-year-old users of
peer-to-peer file-sharing networks, music download sites, streaming sites and search engines.