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.”
Celebs Among Thousands Evacuated in Los Angeles Fires
Wildfires in and around Los Angeles have burned several celebrities' homes and forced stars including Mark Hamill, Mandy Moore and James Woods, to evacuate. Cary Elwes and Paris Hilton are among the stars who said Wednesday they had lost homes in the Palisades fire. California firefighters are battling wind-whipped fires tearing across the area, destroying homes, clogging roadways as tens of thousands fled and straining resources as the fires burned uncontained Wednesday. The Pacific Palisades neighborhood is a hillside area along the coast dotted with celebrity residences and memorialized by the Beach Boys in their 1960s hit "Surfin' USA." In the frantic haste to get to safety, roadways became impassable when scores of people abandoned their vehicles and fled on foot, some toting suitcases. "Evacuated Malibu so last minute," wrote Hamill in an Instagram post Tuesday night. "Small fires on both sides of the road as we approached (the Pacific Coast Highway)." Less than 72 hours before, Hollywood's highest-wattage stars had convened to walk the Golden Globes' red carpet, the first major event of the exuberant and, for many, triumphant awards season. The revelry of awards season had quickly been snuffed out, too: Premieres of contenders like "Better Man" and "The Last Showgirl" were canceled, the Screen Actors Guild Awards nominations were announced via press release instead of at a live event and weekend events like the AFI Awards were preemptively scrubbed. The Oscar nominations are also being delayed two days to Jan. 19 and the film academy has extended the voting window to accommodate members affected by the fires. Here's how celebrities and entertainment companies are being impacted by the fires burning in and around Los... Read More