05.22.2007 10:00 AM
Less than 10 percent willing to pay for video downloads, Forrester says
The paid video download market is a dead end, according to a new report by Forrester Research.
The tech research firm estimates that paid video downloads will peak in 2007, generating $279 million in revenue, up from $98 million last year. Instead, advertising models will drive the online video market.
In the past year, companies such as Apple, Amazon, Microsoft and Wal-Mart have begun offering consumers the ability to download TV programs and movies to own or rent. But a recent Forrester survey showed that only 9 percent of online adults have ever paid to download a movie or TV show.
A recent Forrester report, "Paid Video Downloads Give Way To Ad Models," concluded that these consumers showed they were a niche of media junkies willing to pay for such content. They do not represent the vanguard of a rush by mainstream consumers. Without mainstream viewers joining the party, the video download market will not grow fast enough to support the ambitions of all the companies involved.
For more information, visit www.forrester.com.