Report: Global Online Video Market to Grow Tenfold

  |  August 4, 2006   |  Comments

Households consuming video online will climb from 13 million in 2005 to 131 million by 2010.

The market for video online will grow from 13 million households worldwide in 2005 to 131 million by 2010, according to a report from In-Stat.

The report predicts broadband adoption will more than double from 194 million households to 413 million in the next five years, and that 37 percent of those subscribers will be downloading video. Asia will lead the growth, followed by North America and Europe.

"The future of television is slowly being defined online, where the big Internet portals are finding ways to blend professional video with their high-touch services that follow consumers from screen to screen during the course of a typical day," writes report author and In-Stat principal analyst Gerry Kaufhold.

The likes of AOL, Google, Yahoo and MSN are now streaming short video to 12.8 percent of broadband subscribers, and broadcast executives are already looking at how “to capitalize on all this personalization stuff.”

Kaufhold expects broadcasters already focused on video to close the gap with Internet companies in video distribution. “Movies will be the slowest because of download time. Even with rights management and copy protection issues resolved, movie studios are in great shape to take it slow.”

One change already underway, he noted, is the oft-predicted decline of the 30-second spot and its replacement with shorter form ads and branded content. “If you’re a creative guy at an ad agency,” you might see the possibility for “entertainment snacking” on six-minute mini-programs that are ads in disguise. “By the time you think of turning it off, it’s over.”

Technology, of course, has some catching up to do before longer video forms are ready for prime time, but those are very much in the pipeline. Video “will be easier to manage” with the advent of faster processors, Microsoft’s Vista video-oriented operating system due next year, and Intel’s Viiv multimedia PC platform that incorporates digital rights management and video processing chips on the motherboard and in the CPU.

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