15 December 2005
The broadband video market will expand rapidly to be worth over $16 billion by the end of the decade, ABI Research has predicted.
The announcement came after figures revealing more than 100 per cent growth in both pay and ad-funded broadband video markets by the end of 2005.
Film studios and record labels are becoming more confident in the new medium after the explosive success of services such as Apple's iTunes, while advertisers are investing increasing amounts of money in efforts to tap into the younger demographics who spend more time online than they do watching TV.
Mike Wolf, ABI's head digital and broadband analyst, explained how continued interest has in turn fuelled investment.
"Disney/ABC's announcement that it would sell episodes of 'Desperate Housewives' for $1.99 per episode through iTunes has helped garner additional momentum for a market that was already strong," he said.
"Other announcements, such as NBC's decision to push its flagship nightly news online through an ad-supported model, are sure signs that content companies are re-examining their traditional distribution channels to see where broadband video can expand their overall reach."
Major technology firms such as Microsoft, Sony and Apple have found themselves in the position of 'key gatekeepers', exercising considerable leverage with broadband suppliers who wish to reach 'digital home' consumers.
While the changeover may not happen immediately, broadband's continuing growth could well eventually spell extinction for more traditional video formats.