According to a new forecast from IDC, Internet video services will generate over $1.7 billion in revenues by 2010, an increase of more than $1.5 billion from 2005 totals. Much of this growth will be fueled by a surge in the amount of premium content made available online. However, IDC cautioned that the market's potential could be dampened by key technical and legal hurdles.
According to the report, key drivers for the adoption of Internet video include the expansion of premium content offerings online and the emergence of home networking solutions that allow consumers to view Internet content on their televisions. As services become more common, content owners will leverage Internet video to complement their existing revenue streams and to generate additional revenue from archived content and new content created specifically for the service. IDC expects content owners will migrate toward three basic service types. Advertising-based services will remain the dominant type of Internet video service, although its share of total market revenue will decline as a la carte services, buoyed by consumer familiarity with iTunes, grow dramatically over the next 2-3 years. Subscription-based services will experience steady growth throughout the forecast period, enhanced somewhat by the emergence of home networking solutions that make subscriptions more appealing to consumers.
The IDC study, Ready, Set, Watch: U.S. Internet Video Forecast and Analysis 2005-2010 presents the 2006 - 2010 forecast for U.S. Internet video revenue. The report identifies content types and business models, profiles vendors, and examines the market's opportunities and challenges. Revenue forecasts are broken down by service and content types.