According to research company Parks Associates, the number of broadband households that pay for online video is about 12 million. That’s up dramatically from 2005 to 2006 when there were about 3 million.
It looks like this 300% growth in paid video content is the result of a) having video content available and b) having good content. The growth of paid video sites like iTunes, Amazon and even NetFlix is what’s driving this. Consumers want brand-name TV and movie entertainment that they can rent or buy and take to their portable devices, or TV screens.
Parks said that the market for online video is still in flux: “With issues surrounding content rights, the role of incumbent video providers, business models, and questions about how consumer electronics manufacturers and other service providers will actually succeed, the space is very fluid at this point.â€
Case in point: Apple’s iTunes and how NBC Universal decided to take their content to their own Hulu.com and even Amazon.
Another interesting development is the adult entertainment market which could very well be a huge factor in paid video content. I don’t know whether Parks Associates is looking at this market, however, but it’s definitely where a lot of technological innovation happens.
I’ve got to imagine that Parks isn’t including the adult VOD transactions because I think WantedList.com alone has almost a millions subscribers right now. Technically, this isn’t really VOD, but it would certainly suggest that the market for adult VOD has been more popular then the one for Hollywood content. As more premium content comes online, we’ll probably see this mix shift a little bit, but it wouldn’t surprise me if there were two adult downloads for every mainstream one.
Comment by Davis Freeberg — October 5, 2007 @ 9:37 am