Interesting to read in the Financial Times that even as revenue from paid video downloads increases over the next few years, the ad-supported online video model could be in danger of becoming irrelevant, so says a new report from Adams Media Research. While the report forecasts video-downloading revenues to reach $4.1 billion a year by 2011, revenues from ad-supported online video are expected to reach only $1.7 billion in 2011 – Which is not much of a gain in five years over 2006 revenues of $409 million when you think about it. Demand for ad-supported programming, which is used primarily on the websites of the networks, reflects the consumer’s willingness to consume things on the same terms as commercial television. Meaning putting up with intrusive ads for the sake of getting cheap content. The real crunch will come as Amazon’s Unbox service and Wal-Mart’s just launched video download service start to gain traction. The next couple of years will be interesting, and there’s going to be lots of money made. But I guarantee, there’ll also be a lot of money lost.
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Easy come... Easy go!
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