Report: Video Streaming on the Rise

NEW YORK, December 22: New research from Ipsos MediaCT’s MOTION study asserts that 57 percent of American Internet users aged 12 and up and have streamed video content in the past 30 days—a 7-percent increase from 2007—versus just 22 percent that have downloaded video.

The study notes that users are avoiding the download model partly as a result of pricing, and partly because of storage and portability issues. "U.S. consumers have shown their willingness to adopt new technologies, as demonstrated by their use of the myriad of digital services offered by the Internet," said Brian Pickens, the senior research manager at Ipsos MediaCT. "However, consumers need that initial trial incentive, and offering movie downloads at a price lower than DVDs would help drive trial. While there may be a cannibalization concern for physical DVDs by lowering the price for online movie downloads, a strong demand for physical DVDs remains. The movie download option could prove to be a significant revenue source for the studios."

The survey reports that 25 percent of Internet users streamed TV shows in the last month, up from 12 percent in December 2007, and 17 percent streamed movies, up from 5 percent. For digital downloads, 11 percent of users downloaded TV shows, up from 7 percent, and 11 percent downloaded movies, up from 8 percent.

Ipsos also notes that the ideal pricing for a monthly subscription-based service to an online website with unlimited streaming of movies, TV shows and other events is $5 to $10. Pickens concluded: "Obviously, this is driven by the long-form content available to the consumer for subscription, but it is important to note monthly streaming services could become a significant subscription-based opportunity versus fee-based downloads for video content. While we have seen ad-subsidized streaming grow dramatically in the past six months with sites like Hulu, Veoh and Fancast—providing a significant outlet for ad-supported streamed content—we are also seeing consumer willingness to pay a subscription to have online access to long-form video content streams such as movies and TV shows."

—By Mansha Daswani