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Online ad revenues for broadcast and cable networks will make strong gains, growing from $1.4 billion, or 2% of ad revenues in 2007 to $6.4 billion, or 8%, in 2011.
Convergence forecasts that online ad spending will more than double by 2011 to $47.5 billion.
Online viewing of streamed TV episodes grew to 9% in 2007 and is expected to grow to 23% in 2010. ABC and NBC had the most viewers among broadcasters, while Viacom led cable outlets.
But Convergence believes growth in online streaming of TV shows will be limited by the DVR. By the end of 2010, 48% of U.S. TV subscribers will have a DVR, nearly double the number that do today.
“Given the option of watching TV and skipping ads, and watching online video with ads, we believe the majority of consumers will choose TV and the DVR,” the report states.
Convergence sees even slower growth in the paid download business and says movie and TV downloads and rentals through iTunes, Amazon and others will have little impact on the DVD business over the next few years.
Convergence predicts in-store DVD rental revenues will account for less than half of all rental revenues by 2010 as Netflix, Blockbuster and other DVD by mail services take over a growing share of the market.
Researchers predict in store rental revenues will account for 44% of movie/TV rentals in 2010, with mail rentals from Netflix and others accounting for 37%. Rentals through kiosks will make up 11% of all rental revenues and online rentals will account for 7%.
That’s a dramatic shift from 2007, when 71% of rental revenues came from in store rentals, 25% from mail rentals, 4% from kiosks and 1% from online.
On the sales side, Convergence expects download sales to grow from 2% of disc sales in 2007 to just 3% in 2010.
Download services face a number of hurdles including an unfavorable revenue split with the studios and a delayed release window while also having to convince consumers to buy a set-top box to view the downloads on their TV, says Convergence.
Link to VB story: http://www.videobusiness.com/article/CA6547744.html?industryid=47212
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Strong growth expected for ad-supported online video, not so much for paid downloads - April 18, 2008
An extensive report out today about online video growth, or lackof, and its impact on traditional distribution from the Convergence Consulting Group ((link to report: http://www.convergenceonline.com/reportB.html) with a lot of data.Online ad revenues for broadcast and cable networks will make strong gains, growing from $1.4 billion, or 2% of ad revenues in 2007 to $6.4 billion, or 8%, in 2011.
Convergence forecasts that online ad spending will more than double by 2011 to $47.5 billion.
Online viewing of streamed TV episodes grew to 9% in 2007 and is expected to grow to 23% in 2010. ABC and NBC had the most viewers among broadcasters, while Viacom led cable outlets.
But Convergence believes growth in online streaming of TV shows will be limited by the DVR. By the end of 2010, 48% of U.S. TV subscribers will have a DVR, nearly double the number that do today.
“Given the option of watching TV and skipping ads, and watching online video with ads, we believe the majority of consumers will choose TV and the DVR,” the report states.
Convergence sees even slower growth in the paid download business and says movie and TV downloads and rentals through iTunes, Amazon and others will have little impact on the DVD business over the next few years.
Convergence predicts in-store DVD rental revenues will account for less than half of all rental revenues by 2010 as Netflix, Blockbuster and other DVD by mail services take over a growing share of the market.
Researchers predict in store rental revenues will account for 44% of movie/TV rentals in 2010, with mail rentals from Netflix and others accounting for 37%. Rentals through kiosks will make up 11% of all rental revenues and online rentals will account for 7%.
That’s a dramatic shift from 2007, when 71% of rental revenues came from in store rentals, 25% from mail rentals, 4% from kiosks and 1% from online.
On the sales side, Convergence expects download sales to grow from 2% of disc sales in 2007 to just 3% in 2010.
Download services face a number of hurdles including an unfavorable revenue split with the studios and a delayed release window while also having to convince consumers to buy a set-top box to view the downloads on their TV, says Convergence.
Link to VB story: http://www.videobusiness.com/article/CA6547744.html?industryid=47212
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