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From 2006-IPTV, Streaming Movie Revenue Set to Explode, Says Insight Research
Friday April 21, 10:00 am ET 2006

BOONTON, N.J., April 21 /PRNewswire/ -- Streaming video and music distributed across the Internet or directly to a mobile handset is fast becoming a mainstream entertainment delivery vehicle that will generate more than $27 billion in network-derived and content-derived revenue into the US markets by 2011, according to a new market research study from The Insight Research Corporation. Streaming media refers to the transmission of digital audio and video files over an IP network or wireless network in real time or on-demand, while prohibiting users from storing the files locally.

Insight's market analysis study, "Streaming Media, IP TV, and Broadband Transport: Telecommunications Carriers and Entertainment Services 2006-2011," describes the technology and market forces underpinning the network-derived revenues generated from distributing streamed content across the public Internet, content distribution networks, cellular networks, or telco IP networks. The study also estimates the revenue from the various types of content-derived revenues, along with associated advertising revenue. The streaming market is expected to grow at a compound annual rate of nearly 32 percent over the next five years, driven by on-demand audio, on-demand video, as well as the accompanying advertising revenue.

"The US streaming media market has entered a growth phase, meaning it is experiencing realistic and sustainable growth," says Robert Rosenberg, Insight Research president. "The forecasts that we present are conservative and in line with current performance. If, however, per-stream costs drop faster then anticipated, we have quicker acceptance of IPTV, or improvements in 3G delivery take place faster than expected, it could blow the doors off of our forecasts, propelling this industry into explosive growth," Rosenberg continues.

http://biz.yahoo.com/prnews/060421/laf009.html?.v=53

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IP Entertainment Starting To Rock

David Richards - Tuesday, 18 April 2006

Leading digital lifestyle research group Park & Associates claims that the recent announcement that Walt Disney will offer programs for free from their Website is a large step forward for the adoption of IP video delivery.

It is also a boost to the role that the home computer will play in aggregating and displaying entertainment content, the projected growth of multimedia networks, and a shift in advertising toward a more targeted, user-focused means of delivery.

The research group claims that the announcement immediately enhances the broadband-connected computer as an alternative entertainment hub in the home – further diminishing the hegemony of the traditional TV and set-top box pairing. Video entertainment is increasingly a personal experience, with one person filling the "two-foot experience" with simultaneous instant messaging, e-mailing, Web surfing, and video viewing. For people who suppose that consumers will find the home computer an inferior entertainment platform, they have clearly not witnessed a teenager "consume" a Media Center PC, time slicing between its many functions. These many capabilities, on the other hand, could take a large bite out of the time spent in front of the HDTV in the living room.

The fact that popular programming is available online immediately puts the broadband providers into the primetime program delivery business as users find yet another justification for their broadband subscriptions. Despite the great appeal of DVRs, the ability to call up one's favorite programs anytime without having previously recorded them gives consumers with even greater control. We certainly don't believe these developments will cool consumers' enthusiasm for the TV experience in the living room, but we do see that the cable companies and satellite providers will have to work hard to prevent further erosion of time logged on the couch.

Of course this announcement gives a nice lift to Microsoft's Media Center PC, Hewlett-Packard's push of the entertainment PC (ePC), and Intel's Viiv™ initiative. While we are still hesitant to predict a PC acting as a media server in every living room, the availability of compelling and high-quality video content from the Internet will serve as a driver for consumers to consider – at the very least – directly linking a multimedia PC platform to a digital television display to enhance the viewing experience.

Advertising as Infotainment

The ABC/Disney announcement further opens the door for an advertising model that should be highly palatable for consumers. The company will offer viewers a choice of advertising formats – traditional or "game-like." Targeting features will enrich the advertisements – the viewer will log in via the portal, enabling a middleware application that will take his or her viewer profile and position advertising the viewer is actually interested in watching. It stands to reason that the combination of highly qualified prospects and happy viewers will equal strong advertising revenues.

The success of Disney's experiment hinges on the satisfaction of both consumers and advertisers. Disney is trialing with fewer ad minutes per episode (down from 15 minutes per hour to only three minutes) and longer form (one minute in duration) to avoid audience fatigue. At the same time, however, the company can charge higher ad rates due to higher targetability and accountability for Internet-based ads than traditional broadcast ads.

The first two months of experiments will be crucial for building advertisers' confidence in this new advertising opportunity. If successful (depending on each advertiser's internal goal), we are likely to see steeper cuts on traditional TV ad spending from major advertisers from the automobile, food, pharmaceutical, and beverage industries. We don't know the expectations of advertisers but speculate that they will be happy if the demand exceeds the aggregate viewership of a couple of cable channels (2-3 million).

The Role of the Middleman

Walt Disney, the last major movie studio to start working with Movielink, has been looking to chart its own path into new media. Disney harbors some significant ambitions for controlling a large amount of IP content, and it views the migration to digital as its chance to really re-write the rules to its advantage. Its relationship with Moviebeam, video content sold on iTunes, and this most-recent announcement are all examples of how the company is seeking to establish a more direct relationship with consumers, cutting the middlemen out in the process, whether those middlemen are the cable or satellite TV providers, aggregators such as Google or Movielink, or their own affiliates.

Choices, Freedom, Control

Prior to 2006, as we were mulling the potential growth of broadband-delivered video services, we recognised that the video creators and owners would act with greater expediency to 1) get their compelling content to IP channels; and 2) think flexibly in terms of the business models applied to it. After all, leaders in the entertainment industry learned a painful lesson about what the impact of Net piracy can be to the music business, and the studios desired a more proactive approach and at least experiment with their own IP deployment models. Disney's foray into ad-supported IP content is just one of what we expect to be many similar announcements through the course of this year.

And, whether the "winning" model turns out to be $1.99 one-off downloads, a $15.99 subscription, a $20 download-to-own offering, or an ad-supported free view, one finding resonates most strongly with us. In our groundbreaking Global Digital Living™ research of approximately 10,000 consumers in 13 countries spanning North America, Western Europe, and Asia-Pacific nations, consumers told us that they place a higher premium on content services that provide them with more choice, flexibility, and convenience. And we believe that they will pay – either with their local currency or their eyeballs on advertisements – for such services. Either way, we'll learn much from Disney's experiment.