User-Generated Video Growth Flattening

User-generated video growth is set to tail off, despite being a relatively new phenomenon, according to a new report from British market research firm Screen Digest. At the end of 2006, user-generated videos made up 47 percent of the U.S. online video market (updated) of 12.5 billion total video streams, says the firm. By 2010, that figure will climb to just 55 percent of the 44 billion video streams expected to be consumed in the U.S. that year.

At the same time, online video revenue is expected to grow to $900 million by 2010 from $200 million in 2006. User-generated video, mostly supported by advertising, is expected to account for just 15 percent of this revenue. That’s a pretty conservative estimate, but it makes sense given the increasing availability of professional content online.

Says the report,

Site owners and advertising agencies could struggle to find a cost-effective way to plan and place relevant advertising on millions of different videos. Whilst they are experiencing a period of trial and error searching for the right advertising formats, the sites risk losing their ‘cool’ factor as users are turned off by finding mainstream advertising on their personal videos.

Sorry for the spotty data (e.g. no number for total number of video streams in 2006, no definition of “user-generated content”); we are using a press release found after seeing a mention on the Splashcast blog. We’ve put in a request with the firm to get more detail.

Update: Screen Digest sent us an executive summary of the report that answers our key question about a comparable estimate for the number of online video streams in the U.S. in 2005. It is 12.5 billion (again, forecast to reach 44 billion by 2010). So that’s a ton of growth predicted on all online video fronts, but still flattening growth on the part of user-generated video as compared to other video.

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