Paid video downloads doomed (or not)

A new report from Forrester Research pronounces a death sentence on the paid download market. According to an Information Week account (I can’t afford the report itself), the video download market will peak this year with $279 million in revenue, up from $98 million last year.

The research firm has found that only 9% of adults online have ever paid to download a movie or TV show, and that these consumers are “niche media junkies” who “do not represent the vanguard of a rush by mainstream consumers.”

“The paid video download market in its current evolutionary state will soon become extinct, despite the fast growth and the millions being spent today,” predicted Forrester analyst James McQuivey. “Television and cable networks will shift the bulk of paid downloading to ad-supported streams where they have control of ads and effective audience measurement…”

Well, isn’t that special? Niche media junkies, huh? Not the vanguard, huh? Don’t you just love the way researchers categorize people as “mainstream consumers?” The implication is that we’re all just lumped together waiting for the easy road of passive entertainment.

What’s missing here (and in similar types of summaries) is the degree to which people are trying to escape commercial interruptions and how technology is enabling that. The assumption that these studies make is that people would rather sit through ads than pay for an ad-free environment, but the hue and cry from the public whenever TiVo talks about disabling fast-forward during ads ought to give you a hint.

I don’t doubt that ad-supported content will always have a place — and perhaps THE place — in the world of video downloads, but I don’t think this market is anywhere near as doomed as the folks at Forrester would have us believe.


  1. Niche media junkies? WTF does that mean? The only TV I have watched in the last five or six years is currently stored on my iPod — a little Law and Order SVU and a lot of CSI. (I take that back — I rented the whole Six Feet Under series when I was house-sitting out in the country. But that’s it.) I paid $1.99 per episode, so that I could carry Chris Meloni and William Petersen (Det. Stabler and Dr. Grissom, respectively) around in my pocket and watch whenever I want, pausing at will, re-watching as many times as I choose, without commercials or anything else that annoys me.

    In other words, I want what I want when I want it, and I am willing to pay for it. I thought the term for that was “human being fortunate enough to have a little disposable income.” It turns out that makes me a “niche media junkie.”

    Who knew?


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