12 Million US Households Are Paying for Online Video Downloads (Up From 3 Million a Year Ago)
For those looking for data points suggesting a rapidly growing market for online video - beyond UGC - I'd recommend reading a new report from media research house Parks Associates. The report, titled "Broadband Video: A Market Update," provides some very interesting data points as well as insights as to a) what is working (hint: complimentary services like BBC's iPlayer) and b) what the hurdles are to mass adoption. Read the rest of this entry for some of the points I found most interesting in the report (and visit the site and download the free report).
1) 19% of US households with broadband are paying for video content - roughly 12 million households, up from 3 million a year ago. Pretty impressive. A lot of this is iTunes, but the advent of new services from major broadcasters and studios is starting to drive the numbers as well.
2) Two rising profit centers from the last 5 years - DVD sales and rentals - are experiencing a significant slowdown in growth (see chart below). DVD rentals and sales grew by 240% between 2001 and 2004, but have now settled in to flat (sales) or 10% annual growth (rentals). Parks doesn't point to any one cause for this, but does point out that more people are watching content On Demand (via their cable provider, for example) and using DVR's to record programming (an estimated 11% of US households now have DVR's).
3) The Parks report notes that "Broadcast networks are reporting early success for their online offerings," including a strong argument that the "catch up" model will be a hit with consumers (among other strong data points, the report cites data from NBCU that says 78% of online users are catching up, vs using the web as a replacement for traditional tv).
There is a lot more in the report worth reading - the last several pages highlight "Key Takeaways" which are pretty insightful. Go to the Parks Associates web site and get the report.
