It’s no mystery that online video is on the rise. YouTube is now racking up over 3.5 billion daily views from over 800 million monthly viewers, television series fans are turning in their TV sets for Hulu and Netflix and more and more brands are investing advertising dollars in online video campaigns. But just how big has online video become? According to a new report from Futuresource Consulting, online video revenues tripled this year and they are on the path to becoming a $7 billion industry by 2015.
According to Mai Hoang, Senior Analyst at Futuresource Consulting, “Total online views are on track to grow by 20 percent and paid-for online video revenues will reach in excess of $3 billion this year. Online purchase and rental transactions are playing a part, but the majority of this revenue is coming out of the USA, predominantly through streaming subscription service Netflix. By 2015, paid-for online video spend is forecast to hit close to $7 billion across the four countries.”
As Mai Hoang said, currently a large chunk of online video revenue is coming out of subscription services like Netflix in the US. However, moving forward Futuresource predicts that streaming services in Europe will start to account for a bigger piece of online video revenue as Netflix spreads to an international audience and YouTube’s movie rental service picks up.
Ads are likely to account for a much larger percentage of ad revenue as well. Mai Hoang says, “Brands have only recently started to harness the full potential of online video, with ad-funded revenues expected to grow by 50 percent in 2011 as advertisers continue to develop and refine content specifically for the online environment, rather than repurposing content originally destined for television. At the same time, consumers become more receptive as ads are effectively targeted.”
Additionally, as online video becomes more accessible via mobile devices, tablets and connected TV sets, revenue is likely to grow even further.
Chris Atkinson of ReelSEO brings up a good question. He says, “I’m beginning to wonder if the 2015’s projected $7 billion figure might be selling online video short, even though that is a lot of money. With Cisco predicting 90% of Internet traffic being online video by 2014, Netflix and YouTube’s continued expansion, the tremendous growth of mobile devices, it’s not hard to think of an even larger number.”
What do you think? Will online video revenues surpass Futuresource’s predictions of $7 billion by 2015? Share your thoughts with us in the comments below.
Megan O’Neill is the resident web video enthusiast here at Social Times. Megan covers everything from the latest viral videos to online video news and tips, and has a passion for bizarre, original and revolutionary content and ideas.