People to Pony Up Billions for Premium Vids

Don’t let the deaths of Vongo and ClickStar fool you — there will be a market for Internet-delivered movies and TV shows, but it will be through the TV. A new study from Parks Associates predicts that U.S. consumers will shell out more than $6 billion for premium Internet video services by 2013, with direct-to-TV videos accounting for 75 percent of that revenue.

So while PC-based movie delivery services like Vongo never caught on, connected set-top boxes and televisions will. And these figures don’t include advertising revenue. The numbers shown here represent just what consumers will be willing to plunk down their credit cards for.

“There was so much doom and gloom about Internet video and how woeful the transactional market has been,” Parks Associates VP and Principal Analyst Kurt Scherf told me. “But I think what a lot of poeple haven’t taken into account is the Xbox and Xbox Live. Thirty percent of Xbox 360 users are downloading videos each month, and 80 percent of those people are paying for them.”

Scherf also said that 35 percent of broadband-connected TiVo owners were downloading premium content from Amazon Unbox, though it wasn’t clear whether they were paying for the videos or downloading the free content like movie trailers.

Elsewhere, In-Stat came out with its own study predicting worldwide online revenue will hit $4.5 billion by 2012, up from $1.2 billion in 2008. Purchased and rented videos is expected to take off in the near-term, with ad-supported TV content picking up steam and becoming a major contributor by 2012. In-Stat also projects that, by 2012, 39 percent of adults in the United States will have purchased or rented online video.