Sales of online films look set to make almost $1 billion by 2010, with the impact of piracy predicted to be less severe than expected, according to a new report published by Informa Telecoms & Media, due to be released on Monday.
The report reveals that the cost to the industry from digital piracy was $858.5 million in 2004, predicted to increase to $1,7 billion in 2010.
Commenting on the findings, Adam Thomas, author of the report said: “Any loss to the industry, particularly one of $850 million, is unwelcome, but the impact of illegal file sharing shouldn’t be overstated. Anti-piracy measures from the MPAA and others are already relatively successful in limiting the problem.”
He continued: “Also, lots of the movie files being downloaded are of inferior quality and are unlikely to affect whether someone goes on to buy a film from a legal source. In a small number of cases these files can also have a positive effect, by acting as an extended trailer for a film and encouraging legal purchases from those wanting to see a perfect version of the title.”
Informa forecasts that the legitimate value of global film sales via the internet will reach $3.6 billion in all forms by 2010, about four times the 2002 figure. North America looks set to remain the largest region for online film revenues, accounting for 47% of the total in 2010.
While hard format sales via internet retailers comfortably account for the majority of revenues throughout the forecast period, its dominance in 2004, with a 99.3% share, will be reduced by 2010, when a 72.9% share is anticipated.
Digital downloading is expected to be the most successful in the “soft” format category, with streaming being less desirable.
Adam Thomas predicts that the next four or five years will see online film services take off and said: “Several factors will contribute to this growth, but perhaps most significant is renewed market confidence following the dotcom crash. This is producing a climate in which there is now a much greater willingness to invest in emerging sectors like online advancement in home networking that make it easier to view downloads on your TV, rather than your PC.”
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