Revenue For Free To View Web TV Services To Rise To £98m by 2012
Revenues for free to view web services will rise by only £1 million from 2007 to 2008, but are expected to increase to £98 million by 2012 as commercial services pick up market share, according to a report from Screen Digest.
Screen Digest estimates that the BBC’s on-demand video services, including the iPlayer, accounted for 38% of the UK’s free to view web TV services last year.
Around 800 million streams and downloads were initiated by UK households last year and that figure is expected to rise to 2.8 billion by 2012.
The research commended the BBC’s decision to move the iPlayer away from a download application to a player that works within a web browser, which is easier to use.
This triggered a new wave of users, with more than 250,000 shows downloaded or streamed in the two weeks after relaunch, according to Screen Digest.
Using Flash technology to play video without needing a third party application is also popular with users.
Rapid growth of online viewing will continue, according to the report, particularly through new viral features that will allow iPlayer content to be embedded on blogs and external websites.
However, Screen Digest says the iPlayer’s success highlights the problems with similar services.
Channel 4’s 4OD service is cited as one that imposes “an unnecessary barrier to initial consumer adoption and hampers market growth” because users have to download a desktop programme to use the service.
But the dominance of the BBC’s iPlayer is building a precedent for free services that is making it harder for revenue-generating commercial strategies for online video to establish themselves.
“Screen Digest’s long-term financial outlook of the UK online TV sector will now be dependent on the future development of convincing platform strategies by UK commercial broadcasters ITV, Channel 4 and Five, as well as new entrants such as Bebo, MySpace, YouTube and Joost,” said the Screen Digest senior analyst, Arash Amel.
“It is expected that the success of the BBC’s iPlayer open web streaming model, and future ‘viral syndication’ strategies, will encourage UK commercial broadcasters to enter a long-term reassessment of how they deliver programming to users.”
Last month, Tiscali’s TV Trends Report 2008 revealed that more than a third of British consumers (37%) are now regularly watching on -demand content, twice as many as last year.
The report said that 86% of those watching on-demand TV are watching at least as much, if not more TV than a year ago. In addition, almost two thirds of British consumers (64%) said traditional TV schedules restrict their viewing too much.
The main reasons given for abandoning the TV schedules are to catch up with what they’ve missed (58%), overcome schedule clashes (39%) and just to make their TV viewing more flexible (49%) (see More Than A third Of British Consumers Watch On-Demand Content).
In October, Continental Research reported that the number of people watching internet TV had increased steadily year on year, suggesting a healthy future for this technology.
In particular, the number of people watching shows they have previously downloaded from the internet has doubled, from 1.3 million in 2006 to 2.4 million in 2007 (see Internet TV Growing Strongly).