Internet Video: Direct-to-Consumer Services (Second Edition)

This report examines the market for online and electronic delivery of premium video content, including movies and television programming. It analyzes the brief history of online video distribution, offering commentary and analysis on business models, technology challenges, and consumer adoption. It offers forecasts and predictions for the future of online video distribution, including downloading and direct connections to consumer electronics devices.

"Hollywood has discovered that online video distribution provides more upside to their businesses than risk,” said Kurt Scherf, vice president and principal analyst with Parks Associates. “How the studios work with technology partners, device manufacturers, distributors, and advertisers to sustain momentum will be critical in defining success in the next few years.”

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The Bottom Line

1.0   Notes on Methodology and Report Focus

2.0   The Internet Video Market: A Recap and Analysis

2.1 Market Pace and Key Clues to Market Development

2.2 Key Takeaways from the Early Market for Internet Video

2.2.1    The Active Internet Video Audience is Huge

2.2.2    Pure Transactional Models are Unproven; Greater Emphasis on Ad-supported Models

2.2.3    Syndication and Scale are Key, Meaning More Consolidation among Internet Video Value Chain Members

2.2.4    Niche Content Alone – Too Early for Sustainable Business

2.2.5    Evolution for Survival - Transactional Movie Services

2.2.6    Netflix and Blockbuster - Significant Players in the Internet Video Market

2.2.7    Download-to-Burn Emerges as a Distribution Channel

2.2.8    Incumbent Service Providers Taking a More Active Role in Distributing Internet Video Content

2.2.9    The Broadcast Network Internet Video Offerings are Showing Good Results

3.0   Bringing Internet Video to the TV

3.1 Connected Televisions

3.2 DVD Players

3.3 Game Consoles

3.4 Media Center PCS

3.5 Alternative Set-tops and Internet Content Services Platforms

3.6 Media Adapters/Media Center Extenders

3.7 Other Solutions for Bridging the Internet Video-to-TV Divide

4.0   Forecasts

4.1 Forecast Assumptions: Non-TV Based Internet Video Revenues

4.1.1    Non-TV Internet Video: Movie Rentals

4.1.2    Non-TV Internet Video: Movie Downloads

4.1.3    Non-TV Internet Video: TV Downloads

4.2 Forecast Assumptions: TV-based Internet Video Revenues

4.2.1    Connected Game Consoles

4.2.2    Alternative Set-top Boxes

4.2.3    Media Center PC/“Home Theater PC” Configuration

4.2.4    Connected TVs

4.2.5    Connected DVD Players

5.0   Recommendations for Industry Players

5.1 Content Creators/Owners

5.1.1    Advertisers/Agencies

5.1.2    Broadband (Access) Service Providers

5.1.3    Web/Entertainment Portals

5.1.4    Technology Enablers

Resource Book

1.0   Profiles: Internet Video Service Providers

1.1 Portals

1.1.1    AOL Video

1.1.2    Google Video

1.1.3    MSN Video

1.1.4    Yahoo Video

1.2 Broadcast Network Initiatives

1.2.1    CBS

1.2.2    Disney ABC Television Group

1.2.3    Fox (News Corporation)

1.2.4    NBC

1.2.5    WB

1.3 Internet Video Services

1.3.1    Amazon.com Unbox™

1.3.2    Babelgum

1.3.3    Crackle (formerly Grouper Networks)

1.3.4    Fancast (Comcast)

1.3.5    Hulu

1.3.6    Jaman

1.3.7    Joost

1.3.8    MediaZone

1.3.9    MeeVee

1.3.10  RealNetworks SuperPass

1.3.11  SyncTV

1.3.12  TidalTV

1.3.13  Veoh Networks

1.3.14  Vuze

1.4 Movie Services

1.4.1    Blockbuster (Movielink)

1.4.2    CinemaNow

1.4.3    EZTakes

1.4.4    MovieFlix

1.4.5    Netflix (Instant Queue)

1.4.6    Starz Play (Verizon)

1.4.7    Vongo

1.5 Hardware and Content

1.5.1    Apple TV

1.5.2    Microsoft Xbox LIVE

1.5.3    NeuLion

1.5.4    Sony PLAYSTATION® Store

1.5.5    VUDU

Key Activities in the Internet Video Space: 2007
Key Activities in the Internet Video Space: 2008
U.S. Adult Broadband Users: Percentage Engaged in Internet Video Activities on a Monthly Basis
Biggest Inhibitors to Using Internet Video Services
Internet Portals and Internet Video Experiences
Top U.S. Online Video Properties
Reported Ad Rates: Internet Video Sites
Elements of Internet Video Content and Ad Management
Internet Video Services: High-definition Offerings
U.S. Broadband Forecast: Households with at Least 10 Mbps Downstream Service
Key Players: Content and Ad management, Content Delivery, and Search
Monthly Broadband Users of Premium Internet Video
Millions of Premium Content Downloads/Streams: 2008
Why Do Consumers Stream/Download Movies?
Movie Windows
U.S. Theatrical Box Office and DVD Revenues
Netflix and Blockbuster Internet Video Offerings
Millions of Subscribers: Netflix and Blockbuster Online Rental Services
Internet Video Moves by Incumbent Broadband Providers
U.S. Network Television Advertising Volume
Is Internet Video Decreasing the Primetime TV Audience?
Why Do consumers Stream/Download TV Shows?
Internet Video Results from Broadcast Network
Cumulative Videos Downloaded from Apple iTunes
Apple Music-related Product and Service Revenues
Devices used for Watching Internet Video
TV, DVD Player, and Game Console Adoption
Millions of Recent Buyers in 2007
Connected Televisions and Internet Applications
Connected DVD Players: Content and Use Cases
Game Consoles and Internet Video Content
Type of Video Watched on Xbox LIVE
Identifying Xbox LIVE Paying Video Users
Media Center PC-TV Connection
Media Center PC Usage
Alternative Set-top Boxes and Features
Familiarity with Over-the-Top Video Options
Important Features for VoD Box
TiVo Subscribers
TiVo Usage: Amazon.com Unbox Videos
Media Adapters and Internet Video
Media Center Extenders and Internet Video
Internet Video Bridging Solutions
Non-TV Internet Videos Served: TV and Movie Downloads and Rentals
Non-TV Internet Video Revenues
TV-based Internet Videos Served: TV and Movie Downloads and Rentals
TV-based Internet Video Revenues

Publish Date: 3Q 2008

Pages: 94


Authored By:
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Executive Editor: Tricia Parks
Published by Parks Associates

© August 2008 Parks Associates
Dallas, Texas 75230

All rights reserved.  No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher.

Printed in the United States of America.

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