A new report from UK research outfit Informa says that legitimate online TV and video services will generate revenues of $6.3 billion by 2012, ten times the current rate, and it comes down heavily in favor of advertising based services winning out over a la carte and subscription services.
Our own hearts say please give us a la carte services, but our head says that Informa is right and that advertising and free to web models are finding their way increasingly into service launches.
Informa says that North America will be the largest revenue-generating region, accounting for 65% of the 2012 global total and that a new ‘breed’ of consumers has emerged who find it difficult to align themselves with the passive model of traditional linear TV.
Simon Dyson, co-author of the report said ‘the TV business has already acknowledged some of the changes and is pushing concepts such as on-demand and digital video recorders. The rise of online TV and video is another step that tips the balance of power towards the consumer.’
Informa thinks that the UK and Japan will be the two next countries in revenue terms after the US, but the rampant Asia Pacific economies and China in particular, seem to be nowhere in sight, and that appears to us to be an unlikely scenario in such a long time frame.
Informa says that the challenge for the TV industry is to monetize a massive interest in online content and that the biggest negative for broadcasters and content suppliers is the potential for online TV and video to hurt their existing business models.
To date its harmful impact has been limited and there are examples of a beneficial affect, with CBS and NBC both reporting improved TV ratings for programs showcased online.
Of course there is no guarantee that this will continue, because at some point either internet held content can be seen as readily on a TV set, or the PC will transform into a sitting room device and dominate viewing. Either way then there will be a chance for internet video to replace, rather than augment broadcast TV, and damage to broadcasters may start to happen.
However the report’s idea that YouTube, Google Video, iTunes, MovieLink, Amazon Unbox, AOL UnCut, Yahoo! Video and CinemaNow are best-placed to avoid the internet’s potentially harmful effects strikes us as a little basic. If any of these companies (YouTube and perhaps iTunes aside) were going to have a meaningful effect on viewing habits, they would have done so by now, and we would look to new creations such as Joost, to form the bedrock of a shift to web TV, and create a bigger revenue shift than Informa has reckoned on.