RSSReport: Video Download Market Will Fail
By Ed Oswald | Published May 14, 2007, 5:48 PM
A prominent research firm is calling the for-pay video download industry a "dead end," saying free ad-supported streams would likely take their place. The peak for the industry will come this year, it claims.
According to Forrester Research, premium video downloads will reach revenues of $279 million in 2007, up from $98 million the previous year. Such a market shift could have major implications for products like Apple TV, which depend heavily on the industry.
However, the long development time for Apple TV forced Apple to make decisions on how to handle content on the device long before the market developed. At that time, it was thought that paid video downloads would take off; ad supported video did not exist yet.
"The paid video download market in its current evolutionary state will soon become extinct, despite the fast growth and the millions being spent today," Forrester Principal Analyst James McQuivey said.
Forrester found that less than 1 in 10 online adults have paid for an online video, and that most fell into a group that was willing to spend heavily on content. Without the support of mainstream consumers, the industry is destined to fail.
Forrester predicts that Apple will soon switch to a more open and ad-supported model in order to stay viable. Broadcast networks like ABC have primetime shows available for download free of charge with advertising included. The rise of ad-supported video would also likely supplant the DVR.
"To attract mainstream viewers, media strategy executives must develop new business models and delivery mechanisms to make video downloading ad-supported and geek-free," McQuivey added.
Apple could not be reached for comment on the report, but the company has remained adamant that consumers want to own content.
I'd rather pay for non-ad movies, but of course we'll pay and still get the ads. Just like cable ended up.
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I recently had a presentation by a Los Angeles based DigiSYNc Media that holds a very promising approach to broadband based advertising. Which would negate the Forrester reasearch Report.
Everything I have seen thus far is exciting.
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I honestly don't mind pay for d/l TV if the price is reasonable, and of course quality is good.
If they going to charge like $10+ per movie, I am going out to get the DVD. If I pay for the d/l movie, and when I put it on my big screen, and I see all those boxes, I will not buy it. Why pay and limit it to the monitor?
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If they really hope to actually sell stuff they've got to shut down the Bittorrent sites that give it away. And how many TV shows are really good enough to pay for? It is handy to watch a missed episode but I don't see enough interest to support a pay system.
As for movies, the DVDs usually offer much more than just the movie and they don't have to be watched on a computer screen. There just isn't much current interest in computer screens being used at TVs. And when it comes to movies, there's often pay or specialty channels available on TV that would permit recording that Internet systems don't.
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Theres two reasons why i would ever use this kind of video download service.
If ive missed one episode and i just cant wait for the DVD release, or whatever.
Another is that the TV show simply isnt being shown on my location and its not avaitable elsewhere (including no DVD release). Theres plenty of good TV shows that simply are for US viewers only. Im also a fan of British comedy stuff and i bet theres lot of shows that dont simply will never end up here.
For instance, i started watching The Daily Show (comedy central) after i saw one episode. They offer most of their stuff on their own website. Pure entertainment. :)
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A little early to make such a claim.
Some folks are gonna really enjoy hosting video files on their home server and do something like the AppleTV thing.
I'd be just as happy to download episodes of a season of LOST to my system if I could at least back up those files onto an optical disk for storage offsite. To be able to play them at DVD quality at home would be fine. No disk swapping maybe. Not too bad of a thing to have at your fingertips.
I wonder how many "experts" said that downloadable digital music would not be a money-making enterprise?
Just give it time.
Movies - I'm not sure of. But sports events and television shows might be the sort of thing you want to reference in a group and watch in order.
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I would have no problem with ad support as long as certain conditions were met.
a) NO DRM
b) NO tracking cookies
c) ads can't take up most of my screen
d) movies must be transmitted in such a way that ALL operating systems could view it. This is a waste if only the newest of the new can view it.
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Will someone please explain this to the BBC that no-one is going to pay a premium for programming so just put it out on the net without DRM.
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If the movie industries will allow it then I agree free ad supported services will replace them.
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