Strategy Analytics: Online Video Sales Could Reach $1.5B in 2007

A new report from technology firm Strategy Analytics in Boston predicts that online sales of TV shows, movies and other prerecorded video will become a billion-dollar business in 2007.

Currently, video download sales made through Apple's iTunes store and other sources total about $298 million for the year. But according to the report, "The Video Store Goes Virtual: The Global Outlook for Online Video Sales," the market is expected to grow to $1.5 billion by the end of 2007. It also estimates that by 2010, global revenue from online video sales, rentals and subscriptions will surge to $5.9 billion, accounting for 8 percent of total home video industry revenues.

The report said that broadband growth, consumer demand and a growing number of distributors and payment models will spur the growth of online video sales. While Apple's iTunes store is the current leading source for paid video downloads, others including Wal-Mart, Time Warner, and NetFlix are expected to enter the market in the near future.

"2007 will be remembered as the year in which online sales of prerecorded video finally become a real business," said the report's author Martin Olausson, senior analyst from the Strategy Analytics Broadband Media and Communications service. "Just like with music, online delivery of video content is now emerging as a viable and increasingly important distribution channel for content owners."

The report forecasts global customer and revenue growth for online video sales, rentals and subscriptions through 2010, and includes individual forecasts for areas including Asia Pacific, Europe and North America. It also assesses consumer interest and willingness to pay for video online, and profiles more than 20 companies.