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[September 23, 2003]
In-Stat/MDR Report Says Video Streaming Services To Grow To $4.5 Billion By 2007
According to recent In-Stat/MDR (http://www.instat.com) research, the market for consumer online subscription video streaming services will grow from about $991 million
during 2003, up to more than $4.5 billion during 2007. The high-tech market research firm expects that Asia will be the largest market in 2007, at about $1.2 billion and also predicts that solid growth will occur in Europe.
The world of online content is undergoing a three-way
metamorphosis, creating opportunities for major media companies and large service providers to finally get their fingers into the Internet revenue pie, says Gerry Kaufhold, a Principal Analyst with In-Stat/MDR.
A recent In-Stat/MDR report identifies the following three phenomena that are enabling the online subscription video streaming revolution:
* Lots of people are hooking up at high-speed - more than 30 million households are already hooked up to high-speed Internet connections, and In-Stat/MDR expects that more than 130 million households will be connected by the end of 2007. All of these people are cruising at high speed and will be getting used to having high-quality
streaming video content coming into their homes via the Internet.
* People are finally starting to pay for premium content - during the recent war with Iraq, RealNetworks RealOne SuperPass service experienced an upward spike in subscriptions, because families with loved ones overseas needed to get all of the information they could, and
premium streaming video, from a variety of news sources, pulled in viewers to the subscription-based service. Microsoft�s MSN, AOL, and Yahoo! will be launching premium on-line video streaming subscription services later this year.
* The high-speed connection providers are partnering with content sources to create high value services - the companies who provide the high-speed pipes are working closely with content companies to provided branded premium services that attract new customers, and reduce churn among existing subscribers. Companies such as Italy�s FastWeb, MSN, AOL, Yahoo! Broadband, and others, are providing brand name services in partnership with DSL and Cable Modem
services.
In-Stat/MDR predicts that four categories of subscription services will succeed:
* Sports related services will attract subscribers around the world, and during playoff events. FIFA�s World Cup Soccer will drive growth during 2006.
* Movie and TV related sites, such as CinemaNow, Movielink, and SoapCity will help the Hollywood studios develop their on-line presence.
* General Interest sites from major portal providers will provide the lion�s share of the market, in partnership with sports and movie & TV sites, to drive traffic.
* Video communications services, such as Vibe Phone, Intratel, Yahoo! Broadband in Japan, FastWeb in Italy, and others, will create new video-over-IP services that succeed as follow-up services to voice-over-IP products like today�s VonAge, Net2Phone, and others.
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