Thursday, February 22, 2007
Pay-for to Top Free Video? No ChanceAdams Media Research issued a report saying that while ad-supported video will continue to rule the roost for the next 2 years, pay-for downloads will eventually have more than double the revenue potential of videos with ads.
I have only 3 words to respond: wrong, wrong, and wrong.
According to the Financial Times, ad-supported video earned $409 million last year, nearly 4 time the $111 million in video download sales.
While Adams sees downloads amassing an incredible $4 billion in annual sales by 2011, by that time we'll have a real market for Internet TV as the telecommunications companies will do battle with cable in offering thousands of free channels online. Also, the TV networks and broadband startups will be bringing us hundreds of online programs to fill every niche for free or by subscription.
The pay-for video download market for TV content is never going to materialize in a meaningful way because the alternatives, including renting or buying an entire season on DVD, are too plentiful. The content by and large just isn't worth paying for. If you want to see Desperate Housewives or House, you'll watch it live or TiVo. Individual episodes aren't worth $2 a pop a month or a year after the fact, as the networks realized and quickly moved from iTunes to streaming programs on their own site. The advertising models including interactive content are slowly evolving.
If download video surpasses ad-supported video in revenue in 2009 as Adams projects, I promise to buy and watch an entire season of "The Nanny" in one sitting.
By John Gartner at 01:37 PM | Comments (0)