Internet TV boom predicted

Johannesburg, 11 Apr 2006

Internet video services, such as Internet Protocol TV and video-on-demand, will be a $1.7 billion market by 2010, the International Data Corporation (IDC) recently predicted.

However, MD of World Wide Worx Arthur Goldstuck says in SA "it`s almost impossible to forecast future revenues for an industry that hasn`t even bedded down its business models. At the moment it [Internet video] is all about sport."

He adds that US network NBC proved this year profits can be made in broadcasting over the Net with its coverage of the Winter Olympics - "an achievement that was a wake up call to many broadcasters".

For SA, this is a clear pointer to how important the 2010 Soccer World Cup is going to be on the Internet, he notes.

Accelerating market

The IDC`s report notes: "The market for Internet video services began accelerating in 2005 as content owners, once unwilling to offer their products online, started to experiment with digital distribution as a way to complement their existing business models and stem illegal P2P file sharing and piracy."

The key drivers for Internet video adoption are the expansion of premium content offerings online and the emergence of home networking solutions that allow consumers to more easily view Internet content on their televisions, adds the report.

Sporting chance

Goldstuck says locally "it is obvious that Internet TV broadcasting will for a long time to come represent only a small fraction of the revenues of overall TV broadcasting - being a luxury option for those who have not only the right equipment, but also the right form of connectivity".

Many content producers will now try to target audiences directly instead of via a broadcaster, causing market fragmentation and increased competition, he notes.

"By the 2008 Olympics, we will have a far clearer picture of what works and how, not to mention who will dominate. And that, in turn, will play a large part in how the world views the 2010 Soccer World Cup."

The IDC report states that for Internet video to sustain the momentum gathered in 2005, content owners and service providers will need to overcome licensing issues, competitive challenges and the issue of how to move content beyond the PC.

"The IDC believes companies involved from the creation to distribution of content will have to partner with others across the value chain to create appealing, flexible services that will evolve into viable businesses," it adds.