ABI: Broadband Video Exploding

A report today from ABI Research says that the broadband video market worldwide saw "explosive growth" for 2005 and will grow to over $16 billion by the end of the decade.

A news release today from ABI says that "both pay and ad-supported broadband video markets" grew over 100% year-over-year  in 2005. For this aggressive growth, ABI cited as drivers:

• "consumers' continuing increase in broadband video usage"
• "content owners' demand for alternative outlets as existing channels (cable, broadcast and DVD) mature"
• advertisers' "pushing to increase their expenditure in this market because sought-after demographic groups such as young adults are spending more time online, instead of watching TV"

Mike Wolf, ABI's principal analyst for broadband, digital home and media, cited "Disney/ABC's announcement that it would sell episodes of ‘Desperate Housewives' for $1.99 per episode through iTunes" and "NBC's decision to push its flagship nightly news online through an ad-supported model" as indicative of content companies' strong desire for new distribution channels.

Wolf also mentions the "digital home" trend as important in the development of the broadband video market. Today's release says companies such as Microsoft, Sony and Apple have positioned themselves as "key gatekeepers for consumers with home technology platforms, giving them leverage with content owners looking to reach consumers with broadband video content."

Wolf says, "Consumer platforms, be they Xbox 360s, iPods or TiVos, have millions of loyal users who are hungry for content. The kingmakers in the broadband video market will be those who can offer not just online distribution of content, but can then extend the reach of this content to the consumer, by whatever method that consumer prefers."

AB -- 12/8/05