Paid Video Downloads to Go Downhill

• Posted: Friday, May 18, 2007
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• Author: pradhana

The market for paid video downloads will reach $279 million in 2007, up from $98 million in 2006, according to Forrester Research's "Paid Video Downloads Give Way to Ad Models" report.

That's the good news. The bad news is that paid video download revenues will decrease after 2007. Instead, ad-supported video downloads will become the norm.

"Television and cable networks will shift the bulk of paid downloading to ad-supported streams where they have control of ads and effective audience measurement," said James McQuivey of Forrester. "The movie studios, whose content only makes up a fraction of today's paid downloads, will put their weight behind subscription models that imitate premium cable channel services."

The firm predicted that ad-supported TV show downloading will surpass DVR use by the end of 2008.

Only 9% of online adults surveyed had ever paid to download a movie or TV show — and those 9% were early adopter techies who do not represent the mass market.

Mr. McQuivey said, "To attract mainstream viewers, media strategy executives must develop new business models and delivery mechanisms to make video downloading ad-supported and geek-free." [eMarketer]

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