A La Carte Paid Video Downloads Are A “Dead-End”: Report

A la carte paid video downloads, such as those offered at Apple’s iTunes and Amazon’s Unbox, will peak in 2007, generating $279 million in revenue, up from $98 million last year. Instead, ad-supported and subscription based models will drive the online video market, according to Forrester Research. Forrester’s survey showed that only 9 percent of online adults have ever paid to download a movie or TV show. And that tiny minority is primarily composed of “niche of media junkies” willing to spend heavily on such content; they do not represent mainstream consumers, according to the study.

The paid video download market in its current evolutionary state will soon become extinct, despite the fast growth and the millions being spent today,” says analyst James McQuivey, the study’s author. He predicts that TV and cable networks will shift the bulk of paid downloading to ad-supported streams where they have control of ads and effective audience measurement. The movie studios, whose content only makes up a fraction of today

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