ORIGINAL ARTICLE – Information Week By K.C. Jones
Internet, IPTV networks, and mobile handsets are expected to contribute to the increase, according to an Insight Research report.
Streaming video and music will generate $70 billion in revenue overt the next six years, according to a research report released Monday.
The Insight Research reported that content streamed over the Internet, IPTV networks, and mobile handsets will increase revenue through content and networks.
Insight’s study, “Streaming Media, IPTV, and Broadband Transport: Telecommunications Carriers and Entertainment Services 2008-2013,” covers several issues affecting the streaming market.
On-demand audio and video, as well as the revenue they generate, are expected to boost the market, which will grow at a compound annual rate of almost 29% through 2013, according to Insight.
“The outlook for streaming media has never been brighter,” Robert Rosenberg, Insight Research president, said in a statement released with the study. “Questions surrounding consumers’ willingness to pay for content have been dispelled by satellite radio and iTunes. The forecasts that we present are conservative and in line with current performance.”
In fact, if per-stream costs decrease faster than expected, or consumers accept IPTV sooner than predicted, or 3G delivery takes off more quickly than forecast, “it could blow the doors off” Insight’s predictions and push the industry’s growth to “explosive” levels, Rosenberg said.
Insight examined several factors that face the market, including: licensing, broadband Internet access, mass-market demand, and enterprise use.
Insight said its forecasts include revenues for the U.S. market by network services and by content services. The predictions for network services include digital rights management (DRM), encoding, and performance measurement. Revenue figures for content services cover advertising, music on-demand, Internet radio and video on-demand. Hard copies of the entire 140-page report are available for $3,995.
Dan Rayburn says in Seeking Alpha that he is skeptical of some aspects of the report.
FROM SEEKING ALPHA – READ FULL STORY BY Dan Rayburn
Insight Research is forecasting that streaming content will generate almost $70 billion in the U.S. by 2013. I don’t know how they come up with that number as I have not seen the full report, but $70 billion?
They say the revenue prediction comes from audio and video files transmitted over the Internet, via an IPTV network or to mobile phones. They say that advertising revenue will fuel this growth and that “Questions surrounding consumers’ willingness to pay for content have been dispelled by the popularity of satellite radio and iTunes.”
I would disagree. Customers are willing to pay for music via iTunes, but so far, not videos on a mass-market scale. Over time, yes, more video specific content via iTunes will be purchased but you have to back up the $70 billion number with more than just iTunes as an example. And what does satellite radio have to do with streaming?
They also say that if pre-stream costs drop faster than expected, or IPTV or 3G takes off faster than expected “it could blow the doors off of our forecasts, propelling this industry into explosive growth.”
I am all up for reports that show growth and make predication based on accurate data, but $70 billion is just so far away from reality. If someone has a copy of the full report, I’d love to see how the $70 billion number is calculated.