Online video markets to surge over next five years

Joseph O'Halloran ©RapidTVNews | 09-11-2011

New research from IDATE is predicting that online video will become a mainstream activity over the next five years.
The analyst’s "Online Video: Uses, Markets, delivery technologies/CDN” shows that the online video market will grow at an average rate of 35% per year between 2010 and 2015 to reach €21.7 billion in 2015, some 6% of the total video market.
IDATE states that the video market is already in a healthy state valuing the consumer online video market at €4.7 billion at the end of 2010 and more impressively the global consumer over the top (OTT) video market already being worth €5 billion at the same time.

Supporting its proposition that online video is becoming mainstream, the analyst says that more than four-fifths of Internet users in developed countries are watching audiovisual content via the Web with short-from content such as provided by YouTube or DailyMotion, are the favourite source of content. IDATE also notes significant use of catch-up TV services from Netflix, Hulu, the BBC iPlayer and streaming platforms such as Megavideo.
In terms of age demographics, adoption of online video remains higher among young people, but pay-VOD is heavily used by middle-aged people.
IDATE also make interesting remarks on the business models at play confirming that consumers accept the trade-off between free content/lower quality and paid content/higher quality. In general it says that pay-revenue models are moving from pay-per-view patterns to flat-fee subscriptions, such as used by subscription video on demand services.
It estimates that 48% of the world online market derives from advertising revenues and 52% from pay-revenues, due to the peculiar structure of the USA market with strong sell-through on-demand revenues coming from Apple and Netflix, and to a lesser extent paid TV channels (especially from sport leagues). In most of other territories, the bulk of revenues originate from advertising