It has frequently been said that free ad supported video content is preferable to paid content and now there is a detailed report that examines the paid video download market and terms it “ultimately a dead end.”
The quote comes from James McQuivey, the Forrester Research, Inc. analyst whose May 11 report is entitled, “Paid Video Downloads Give Way to Ad Models.” The report analyzes the paid download market before encouraging marketers to play free, ad-supported content.
McQuivey begins by identifying some of the leading paid download players, from Wal-Mart Stores to Amazon.com, who play pure PC downloads and PC to TV models that play on HDTVs. These companies are challenging iTunes, which is the leader in the paid content space.
“You might expect that these firms see an avalanche of consumer demand,” McQuivey said. “Sorry to disappoint, but only 9 percent of online adults have ever paid to download a movie or TV show.”
McQuivey provides demographic information on the paid download audience, finding it to be primarily male (68 percent), fairly young (40.8, five years younger than the typical online adult), upscale ($78,563. income) and heavy Internet users (18.1 hours per week).
He sees the market peaking this year, when $279 million will be spent. “Downloaders will spend more this year than last since there will be more to buy from a larger number of sources. Plus, they will be joined by a group of slightly less media-intense downloaders. However, this niche can’t sustain dramatic growth beyond 2007.”
He said mainstream video fans will not ramp up their buying because: the PC-to-TV barrier is still huge; media firms are slow to offer their content for paid download; and confusing use rights impede take up.
As the paid content market shrinks, “television and cable networks will shift the bulk of paid downloading to ad-supported streams where they have control of ads and effective audience measurement,” McQuivey said.
He cited free TV streams, including Abc.com’s player and the moves by NBC and News Corp. and CBS to push their TV shows out to partners like AOL, MSN and Yahoo! “With all the top networks putting up free content at such high quality, why would people pay for downloads?” he asked.
McQuivey concluded by encouraging content providers to play more free ad-supported content. “Advertising will remain the most lucrative way to get people to ‘pay’ to watch TV shows,” he said. “With dwindling prime time audiences and the rise of ad-based viewing models everywhere from CBS.com to Joost, advertisers will rush to support the video streaming models that will deliver the audience their ad budgets require.”
Apple and Google Face UK Investigation Into Mobile Browser Dominance
Apple and Google aren't giving consumers a genuine choice of mobile web browsers, a British watchdog said Friday in a report that recommends they face an investigation under new U.K. digital rules taking effect next year.
The Competition and Markets Authority took aim at Apple, saying the iPhone maker's tactics hold back innovation by stopping rivals from giving users new features like faster webpage loading. Apple does this by restricting progressive web apps, which don't need to be downloaded from an app store and aren't subject to app store commissions, the report said.
"This technology is not able to fully take off on iOS devices," the watchdog said in a provisional report on its investigation into mobile browsers that it opened after an initial study concluded that Apple and Google effectively have a chokehold on "mobile ecosystems."
The CMA's report also found that Apple and Google manipulate the choices given to mobile phone users to make their own browsers "the clearest or easiest option."
And it said that the a revenue-sharing deal between the two U.S. Big Tech companies "significantly reduces their financial incentives" to compete in mobile browsers on Apple's iOS operating system for iPhones.
Both companies said they will "engage constructively" with the CMA.
Apple said it disagreed with the findings and said it was concerned that the recommendations would undermine user privacy and security.
Google said the openness of its Android mobile operating system "has helped to expand choice, reduce prices and democratize access to smartphones and apps" and that it's "committed to open platforms that empower consumers."
It's the latest move by regulators on both sides of the Atlantic to crack down on the... Read More