Thursday, October 20, 2005

Asia leading the market for premium internet video

Video content services will become a leading-edge portion of all premium subscription services offered via the Internet, despite some tough competition from other sources, a recent report by In-Stat found. By 2009, the retail value of combined subscription and pay-per-view services will grow to US$2.6 billion, with a compound annual growth rate of 45.1 percent for non-adult video content delivered through the Internet, the market research firm predicts.

The In-Stat report presents forecasts for subscribers and revenues for stand-alone web portals that directly sell subscriptions, as well as Pay-per-View items such as Premium ISP services (MSN Premium), sports video services (MLB advanced media), movie and TV services (MovieLink and CinemaNow) and other video services that are just beginning to emerge.

Asia is the world's leading area for deployment of high-speed, and very-high-speed broadband Internet connections. By 2009, In-Stat forecasts that more than 85 million households in Asia will have a broadband Internet connection. Competition among Internet service providers is fierce in some areas and bit rates range from six megabits per second at the low end, up to some homes that are connected with fiber optics with speeds in excess of 100 megabits per second.

A lot of video content is being pushed around the Internet in Asia. However, a great deal of it is either free, underwritten by advertising support or being illegally moved using Peer-to-Peer networks. In spite of all that, the research firm still expect Asia will be the leading market for video subscription services and that it will experience positive growth "spikes" during 2006, when the FIFA World Cup football matches will be held in Germany and during 2008, when China hosts the Olympics.

Asia will have about 15 percent more premium video subscribers than North America by this year, In-Stat estimates, adding that the region will have 40 percent more than North America in 2008, when the Olympics is held in China. However, the number may be conservative, if China expands their broadband deployments in anticipation of the Olympics, according to the research firm. In 2009, In-Stat anticipates nearly 20 million Asian households will be subscribing to video subscription services delivered via the Internet.

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