Online video viewing set to explode

The number of viewers watching online video is likely to touch just under one billion by 2013, according a new study from ABI Research. The research also shows that watching online video on the PC screen will transfer to over-the-top video delivered to the living room. This continued trend towards TV-viewed online video will help drive overall adoption, as the number of online video viewers grows from 563 million at the end of 2008 to 941 million by 2013.

“All stakeholders in the online video ecosystem are eyeing the living room,” said research director Michael Wolf. “With the continued adoption of network-connected video game consoles, the porting of popular online video services such as Hulu and Netflix onto third party consumer electronics devices, and network operators’ growing interest in over-the-top video, we see this market for TV-displayed online video continuing to grow.”

The growth in viewing on both the PC and TV screen is due to the growth in all forms of content. While much of the content many consumers watch continues to be YouTube-based user-generated content, there is rapid growth in the number of consumers watching premium content such as prime-time dramas and comedies, sport, and movies.

“There is a continued maturation in the various advertising models for online video,” continued Wolf. “At the same time, hybrid models such as those offered by Netflix’s instant viewing service or pay models such as Apple TV will also grow in importance.

Also, while the economic environment will have some negative near-term impact on online video advertising CPMs, ABI Research sees overall viewing of online video growing over the next few years as it is a fairly resilient and somewhat counter-cyclical form of low-priced entertainment.”