SNL Kagan predicts that average on-demand revenue per user will exceed $5 a month by 2010 and $6.56 a month, or about $79 annually, within 10 years.
Multi-channel service providers will generate more than $6 billion from video on-demand, pay-per-view, and near-video-on-demand within five years, according to a study released last week.
SNL Kagan reported that total revenue in the market, which includes cable, satellite, and telecommunications companies' video services, will rise due to several factors.
SNL Kagan predicts that the combined installed base of digital cable and telecommunications companies' video services will push the number of U.S. set top boxes to more than 110 million by 2011. Adult and event pay-per-view will help drive growth as well, according to SNL Kagan's study, "Video-On-Demand: A Strategic and Economic Analysis."
SNL Kagan predicts that on-demand services will become a significant revenue source, that average revenue per user will exceed $5 a month by 2010 and $6.56 a month, or about $79 annually, within 10 years.
Video-on-demand content is generally (95%) free, but sponsorship interest is growing, SNL Kagan said. Costs in that market will likely change so they are based on cost-per-thousand-viewers.
Operators must expand the depth and scope of their offerings and expand network capacity in order to promote growth in the on-demand market, according to the study.
"We're starting to see factors align that can enable operators to translate the rise in on-demand traffic into more significant sales," Ian Olgeirson, senior analyst for SNL Kagan, said in a statement.
According to a study from Insight Research last year, ad supported content has already reached more than 50% of households. That study predicted that more than 88 million homes would have broadband by 2011.
IT's Reputation: What the Data SaysInformationWeek's IT Perception Survey seeks to quantify how IT thinks it's doing versus how the business really views IT's performance in delivering services - and, more important, powering innovation. Our results suggest IT leaders should worry less about whether they're getting enough resources and more about the relationships they have with business unit peers.
What The Business Really Thinks Of IT: 3 Hard TruthsThey say perception is reality. If so, many in-house IT departments have reason to worry. InformationWeek's IT Perception Survey seeks to quantify how IT thinks it's doing versus how the business views IT's performance in delivering services - and, more important, powering innovation. The news isn't great.
InformationWeek Must Reads Oct. 21, 2014InformationWeek's new Must Reads is a compendium of our best recent coverage of digital strategy. Learn why you should learn to embrace DevOps, how to avoid roadblocks for digital projects, what the five steps to API management are, and more.