Forecast: internet TV advertising to be worth $10 billion by 2011

29 07 2007

Online video advertising is set to take 18% of all internet ad revenues by 2011, according to a forecast published last week by research firm Understanding & Solutions (U&S).

“There is an Internet TV ‘goldrush’ in progress,” says the company, “as mainstream broadcasters, cable networks and TV content producers move their content online alongside a new raft of legitimate ‘Webcasters’ (Internet Video and TV aggregators) like Joost, Vudu and Babelgum.”

“Globally, we estimate there are more than 20 billion videos being streamed across the web each and every month. In the US alone, active Internet video users are streaming an average of 55 videos per month – and this is just the beginning,” said U&S principal consultant John Bird.

“Online video is growing at around 200% each year and, going forward, television will be a primary driver. Major US broadcast networks are already reporting tens of millions of streams monthly from their websites, but to build sustainable revenues the industry needs to effectively engage with consumers to understand what works, it needs to establish re-transmission rights and develop audience measurement techniques.”

Unlike music and film industries, which operate with paid-for content, television is predominantly a free-to-air market and lends itself to the Internet. The challenge for the industry will be in harnessing the power of the medium and developing the revenues through sponsorship, advertising, subscription and paid-for business models. Piracy and ‘free’ TV content on file-sharing networks will be an endemic problem faced by the emerging business, as has been the case for the music industry over the last 10 years.”