Online Video Revenues Expected To Soar - InformationWeek

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Online Video Revenues Expected To Soar

The global market for online video content downloaded to a computer is expected to more than triple over the next several years.

The global market for online video content downloaded to a computer is expected to more than triple over the next several years, driven by the availability of video podcasting and other services, a researcher said Wednesday.

Revenues from subscription and pay-per-view services delivering non-adult content are expected to grow to $2.6 billion in 2009 from a projected $745 million this year, said In-Stat, which recently released a report on the online-video market.

The market for premium online video content is expected to be driven by demand for upcoming video podcasting, a predecessor to today's audio podcasting delivered over RSS technology.

RSS, or really simple syndication, is Internet-based technology used to distribute and update content, which is managed and aggregated in desktop software called newsreaders. The projections do not include advertising revenue, which is expected to account for two thirds of the total market by 2009, with subscription and pay-per-view services making up the remaining third, In-Stat analyst Gerry Kaufhold said.

"The bulk of the opportunity will be in selling advertising around the content," Kaufhold said. Entertainment computers expected to support the online video market over the next several years include PCs based on Microsoft Corp.'s Windows Media Center, the iMac G5 from Apple Computer Inc. and computers based on Intel Corp.'s Viiv platform. Kaufhold said Apple's recent announcement to bring ABC's "Desperate Housewives" TV show to its iTunes service marked a "major turning point for video over the Internet."

Besides advertising, video-content providers are expected to make money by developing stand-alone Web portals that sell subscriptions directly, partnering with a few key Web portals or search engines and sharing revenues, working with content aggregators to place video offerings in a pool of licensed content, providing Internet video content to pay-TV services, and repurposing content and re-routing it to partners in the mobile telephone industry, the research firm said.

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