Annual U.S. revenues from Internet video services will exceed $7 billion by 2010, according to Parks Associates’ report “Internet Video: Direct-to-Consumer Services,” released this week.
According to the report, large entertainment companies will own the lion’s share of entertainment dollars.
In 2007, revenue generated by user-generated content and television and news streams will compose up to 85 percent of the total. By 2010, Park Associates predicts downloading and rental of television shows and movies will make up approximately 40 percent of total revenues.
“I wonder where they get their numbers,” Jerry Anders, sales and marketing director for Adult Entertainment Broadcast Network, mused. “I guess those could be right.”
Kurt Scherf, vice president and principal analyst for Parks Associates, said, “The early results are quite promising. Major broadcasters, movie studios, retailers, and content aggregators are all experimenting with new ways to distribute video content online and attach advertising to their offerings.”
Noting the implications for the adult entertainment industry, James Seibert of Hotmovies said, “Anything that mainstream does similar only educates potential customers for us. When we first started and were first to market with a pay-per-minute model, many customers were like, ‘How the hell does this site work?’ Now with in-demand [programming] on TVs in many households, people are more familiar with a pay-per-view or on-demand scenario, so they are already educated when they hit a website.”
The push moving entertainment onto the Net also boosts traditional television viewership and advertising revenues, the Parks report noted. The report encourages content providers to work closely with websites that specialize in user-generated video (like YouTube) or social networking (like MySpace). Parks Associates predicts the same demographic will compose early buyers for Internet video content.
Parks Associates is a market research and consulting firm focused on all product and service segments that are digital or provide connectivity within the home.
