Jupiter: $768M in Video Ads, Latent Demand for TV Shows

JupiterResearch, which predicts online video advertising in the U.S. will reach $768 million in 2008 (that part is apparently from an older report, but I hadn’t seen it reported anywhere yet), said this week that there is latent demand among early adopters for full-length, ad-supported television shows online.

The research focused on shows that are currently broadcasting, rather than classics. It found that 10 percent of online consumers have watched full-length shows online in the last year, while a higher number — 15 percent — indicated they were interested in watching them.

Jupiter considers this 15 percent — which skews young and male — early adopters, even if some of them haven’t adopted watching TV online yet. In order to attract a more mainstream audience, the firm thinks content companies need to give viewers flexible digital rights, unobtrusive advertising (like YouTube’s overlays), and bridge the Internet to the television.

The report also notes that 12 percent of full-length television viewers said they are watching less TV because they are watching more online video, as compared to 3 percent of online consumers as a whole.

Jupiter sees paid video as a much smaller market than ad-supported video. It measured $185 million on Internet video in 2007, and expects that number to grow “modestly” to $195 million in 2008. On the other hand, as the firm has previously noted, video advertising was worth $554 million in 2007 — and that’s expected to rise to $768 million in 2008.

Previous coverage: Solutions Research Group says 43 percent of online Americans have watched TV online, Deloitte estimates 38 percent of consumers watch TV shows online, Horowitz and Associates says 16 percent of high-speed Internet users watch full episodes of TV online each week, and TNS and The Conference Board report 16 percent of American Internet households watch TV broadcasts online. So no, there’s not a firm answer here.