Streaming/Downloading predicted to reach $2.6 billion

With more than 38% growth from video streams in 2006, the market is expected to grow even more this year according to recent research from Accustream. Spending in the category is expected to reach $1.3 billion this year, a 39% increase.

by Kristina Knight

Accustream estimates that around 2.7 billion videos will be streamed or downloaded this year alone. From music streams to movies, users are expected to download or stream 48% and 133% more, respectively, this year.

The majority of the streaming/downloading spend is expected to come from embedded or in-page placements. Researchers expect about 58% of the spend to come from embedded videos in 2007; that will fall to 55% in 2008. By comparison, pre-roll ads are expected to make up 26% of revenue in 2007 and 28% in 2008.

In addition to pre-roll and in-video placements, in-game video ads are expected to show tremendous growth over the coming years. Much of the in-game spend is expected to come from videos embedded within the games.

Which type of video advertising do users prefer? The study found that most are willing to watch ads (pre-roll, embedded or in-page) in exchange for free downloads. Users are also willing to provide some personal information, which marketers could use to better target their ads, in exchange for free downloads or streams.

It seems clear then that users prefer ad-based video models rather than paying subscription fees to watch their favorite clips.