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The Internet will go from the number 5 medium to a number 2 medium in 5 years

23/06/2008 - 15:56

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The Internet will go from the number 5 medium to a number 2 medium in 5 years

Video advertising will be the principal disruptor of Internet advertising, as its revenue grows from $0.5 billion in 2007 to $3.8 billion in 2012 at a compound annual growth rate of 49.4 %.

Overall Internet advertising revenue will double from $25.5 billion in 2007 to $51.1 billion in 2012. During the forecast period, Internet advertising will grow about eight times as fast as advertising at large.

According to a study by IDC, the Internet will go from the number 5 medium all the way to number 2 medium in just 5 years, says the report, making it bigger than newspapers, bigger than cable TV, bigger even than broadcast TV, and second only to direct marketing.

IDC concludes that “what will help drive this trend is that consumers are stating to realize that, as opposed to TV, Internet video lets them watch what they want, when they want, and increasingly, where they want.”

Online video captures share of TV screen time

It is clear that online video is capturing share of TV screen time. A recent study shows that among people who download and/or watch video online, the percentage of video viewed on TV viewed has dropped from 75 to 70 percent over the last year. Video on a computer has climbed from 11 to 19 percent. Among 18-24 years old, 27 percent of their viewing is on a computer. Director at Ipsos MediaCT says: “These share gains in non-traditional video channels are not simply and isolated, generation-driven effect, but rather a large macro-trend in the way consumers want their video content delivered.”

Video viewed on demand will increase to 45% in 2012 from 20 % in 2008

Consumption of video content is expected to rise 25 % to five hours per day by 2013, compared with the four hours now watched in 2008, according to Forrester Research. The increase will be drive by consumers watching programming of all grades via computers, mobile phones, portable media players and even digital photo frames. Obviously, there will be more advertising inventory coming from this extra hour of video.

The thing is that video displays are available in the living room, of course, but also at gas stations and in taxicabs, to name just a few places. And content is being produced by everyone, from professional Hollywood studios to amateurs transferring shots from their mobile phones. Forrester calls the phenomenon “OmniVideo”, and it expects it to continue to be driven by high-speed Internet connections, consumers’ ability to store mega files of video and data, and cheap displays screens.

Forrester forecasts that the percent of video viewed on demand will increase to 45% in 2012 from 20 % in 2008. The percent of video delivered via the Internet climbs to 35 % in 2013 from 10 % in 2008.

The percent of video consumed on mobile or portable devices increase to 15 % in 2013 compared with 8 % in 2008. The amount of “personal” video –i.e. created by oneself or one’s peers- is predicted to increase to 10 % in 2013 from 2 % in 2008.

Now 39 % of viewers watch some type of video on either a desktop or laptop computer.

Forrester doesn’t think that TV networks would be hurt by an increase in video consumption, since consumers and advertisers still want high-end video content, which YouTube does not specialize in. YouTube is a niche and it fills certain gaps in people’s lives, but it doesn’t become dominant. TV networks are likely to fare better than cable providers, who will see audiences migrate to other means of video distribution.

Video classified site combines the power of YouTube and Craigslist

Video classified site has been named as the second most-viewed of all business ideas on, a website which scans for the most promising new business ventures, ideas and concepts.

RealPeopleRealStuff, which launched on May 1, 2007, combines the popularity of online video with practicality of classified ads, allowing both consumers and businesses to create and post their own video commercial, selling real estate, cars, products, and services.

One of the site creators explains that they combine the power of YouTube and Craigslist.

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