“The Internet is going to revolutionize the business of video distribution,” said Tom Adams, president of Adams Media Research (AMR). In a new report, AMR said it sees a period of experimentation with Internet video between 2007 and 2009, where the ad-supported model will dominate.
But as more consumers connect their PCs to their TVs (or the two just become one) spending on downloads will expand rapidly and exceed ad-spending by 2011, according to the firm.
“In all the excitement about product launches by Wal-Mart, Amazon and Apple, people are getting giddy about how fast it will happen,” Adams said.
Internet video is expected to generate $5.8 billion by 2011. Ad-supported streaming to PCs and TVs will account for $1.7 billion.
Consumer spending on movie and TV downloads will top $4.1 billion, up from $111 million last year.
Of course what could upset AMR’s prediction is the arrival of a streaming broadband TV service such as the soon-to-be-seen Joost. That’s especially likely if Joost can get the rights to show successful movies and TV shows.
It already has a deal with Viacom. If it can hook up with some or all of Disney and its ABC TV channels, Warner Brothers, NBC and Universal Pictures, Sony Pictures and its Columbia studio, CBS, the BBC, News Corp and its Fox TV and 20th Century Fox studio, it has the potential to greatly change the online video landscape. It is reportedly already close to announcing deals with ITV and Channel 4 in the UK.
The report covers Internet-based video for 2006. It includes movies, TV shows, music videos, sports and informational videos and user-generated content. The spreadsheet can be downloaded at www.adamsmediaresearch.com.