Continued penetration of broadband, rising spend on digital rentals, and, yes, uptake of advanced 3D, will drive the online movie market is forecast to reach $4.44 billion by the year 2017 says Companiesandmarkets.

In its Online Movies: A Global Strategic Business report, the analyst fundamentally states that online film is film is a fully-fledged industry in itself, gathering critical mass both in terms of number of movie titles, and customer base.

It adds that until recently, the limited playback options of movie downloads, low quality, and the trouble of getting movies off a desktop PC to watch onto the big television screen made them unrealistic for home theatre use. Yet this situation has now been transcended in the eyes of Companiesandmarkets with new web-enabled set-top boxes (STBs) from firms such as Apple and Netflix who can now offer quick download and play functions in personal home theatres.

In addition to Apple and Netflix, the report suggests that key players in the online movie arena will be Amazon, Microsoft, Rovi, Sony Computer Entertainment, and, very interestingly, Walmart.

Companiesandmarkets predicts that growth in the upcoming years will be propelled by a deep-seated demand for digital content consumption, and launch of new hardware integrated with next-generation features. Furthermore, the online film market seems to have escapes the ravages of recession due to the fact that it is one of the cheapest forms of entertainment, and has posted steady and continued gains.
However the analyst warns operators and content owners that there still exists hopes as to the real opportunity in the market. It cautions that even though online movies have been increasing in popularity, they are unlikely to provide content owners with a primary revenue stream at least in near future. Explicitly, it expects that revenues from online movies downloads will not witness the stellar growth experienced in the previous years. Also, as a consumers switch to cheaper rentals from over the top (OTT) online video sources such as Netflix, the result will likely be lower revenues for the Hollywood studios.