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Online Video Downloads to Increase TenFold by 2012, ABI Predicts

Date: 1/29/2008 2:56:38 AM

Worldwide video downloads will grow from 215 million in 2008 to more than 2.4 billion in 2012, with online movie rentals accounting for more than half of these, according to a recent study by ABI Research.

ABI predicts that rental, downloadtoown, and subscriptionbased distribution models will gain significant traction as new technology linking the internet and TV becomes commonplace. Internet movie rentals will likely begin to cut into the traditional video store market, accounting for about half of all online video downloads.

“The opening up of rental for video on iTunes is not surprising, given that is how most consumers looking for legal paid movie downloads will choose to acquire them,” commented ABI researcher, Michael Wolf, on Apple’s recent decision to enter the online video market. “Distribution offerings for movies that are in attractive release windows and that offer easy viewing on a TV or portable screen will see the greatest success.”

But challenges remain for online video services, according to ABI, especially as cable and telecom operators move to dominate the market with legacy Video On Demand offerings. Unattractive online ownership and rental terms offered by movie studios may also pose obstacles.

“Studios are locked into the same 24hour ‘oncestarted’ viewing window and similar pricing for all online rental partners,” Wolf explained. “We believe that over time they will begin to offer greater flexibility, in particular as DVD and other physical media continue to mature and new consumer InternettoTV hardware expands their audience of consumers.”

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