By 2014 consumer spend on digital content across video over all channels will reach nearly $52 billion accounting for 46% of total global spend across packaged and digital media according to new research by Futuresource Consulting
In a clear direction of the way in which the entertainment industry is travelling, despite the ongoing economic downturn, this compared with a 24% share in 2010 and, says the analyst is a clear indication of the way in which the entertainment market as a whole, said to be worth $113 billion, is going digital.
Yet the digital market starts from a small standing. Futuresource calculates that in Western Europe, paid for online video accounted for just 2% of total video spend and 5% in the US in 2010. However the analyst expects the market to gain ground and increase to 12% and 16% respectively by 2014.
The analyst also revealed that although packaged video decline is apparent it will continue to produce significant revenues in the coming years. It calculated that in 2010, packaged video generated $42 billion globally, and will still bring in $33 billion in 2014. “While packaged media is declining, it certainly isn't falling off a cliff," explained Futuresource Senior Analyst, Mai Hoang.
"The decline in packaged media across video, gaming and music has attracted a lot of debate regarding the future of entertainment content, but packaged media still plays a huge part in total sales. Combined with the availability of new platforms, digital and packaged media together will still achieve $112 billion in revenue in 2014.
Hoang added that the analysis identified a number of strategies being trialed to build bridges between digital and physical content, including industry initiatives to push digital through bundling, experimentation with release windows and exclusive downloadable content.
"An estimated 400 billion videos were watched online last year in the US, most of which were viewed for free via services like YouTube and Hulu...For digital, the online user experience needs to be as seamless and enjoyable as possible for the video industry to maximise the future opportunities and make this revenue stream really perform," Hoang concluded.