Easy Now, Video Downloads Not Dead

Forrester released a cranky-toned report today describing paid video downloads as a “dead end” and a “flightless bird,” one that quickly snowballed into blanket statements that all video downloads are dead. But the overstatements that follow in its wake are in keeping with the dramatic report (first mentioned here in our morning news roundup).

Sorry to disappoint, but only 9% of online adults [in North America] have ever paid to download a movie or TV show, whether for keeps or as a rental. And the facts about downloaders suggest that they’re not the leaders in a mass defection from other media; instead, they are a group of video junkies who like their media in large quantities through any convenient channel. [Forrester]

What the report, written by Forrester analyst James L. McQuivey, doesn’t provide is a good description of why the barriers preventing paid downloads could be lifted for ad-supported downloads and streams. The key problems listed — disabled sharing, disabled playing on a television, lack of availability of top-shelf material, uptake only by “affluent geeks” — are not changed with the switch of a business model.

Forrester predicts that the paid download market will rise from $98 million in 2006 to $279 million this year, with average yearly spending going up from $14 to $25. Then the “dead end” kicks in, when mainstream users fail to catch on.

McQuivey estimates ad-supported downloads are the future — if not that, “the internet-friendly set-top box,” or paid subscriptions. All these things are natural progressions of early paid download offerings — as we’ve seen with the baby steps made by Amazon Unbox tying up with TiVo, or the growing phenomenon of networks releasing ad-supported streamed primetime shows, or the closed first-generation Apple TV.

The report predicts ABC will be the first network to offer ad-supported downloads. Then in the next breath it forecasts streaming of TV shows to eclipse DVR use. You’ve got to presume they’re talking about ad-supported streaming making its way onto the living room television; otherwise we can apply Forrester’s arguments right back at them: “The mainstream viewer won’t appreciate the value of a download until it can be viewed on the TV screen,” they say.

This is a heavy helping of different and divergent alternatives — why is it that paid downloads are the only ones being dismissed?

And why is advertising going to bring the TV any closer to the internet? The best answer I can find in the report is that the “secure portability” of ad-supported downloads “will embolden advertisers and producers to untether their content from live streaming.” Hmm.

OK, I’ll give you this — current paid download offerings are pretty terrible, especially for a Mac user like me. And free? Free is great. However, just because paid downloads aren’t perfect so far doesn’t mean they can’t change. But hey, I’m just one of those so-called “video junkies” and “affluent geeks.”

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