Web TV, video 5-year growth is over the top

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Legitimate online television and video services will generate global revenue of $7.9 billion during the next five years, with the U.S., U.K. and Japan leading the way, according to a new forecast by Informa Telecoms & Media.

Advertising-based services will outperform subscription-based services and a la carte offerings, generating about 63% of the total by 2013.

Online TV and video — the so called over-the-top services — are set to be a crucial element of the television market going forward, report author Adam Thomas said Friday.

"The Writers Guild strike brought much of Hollywood to a standstill for several months," he said. "The fact that revenues derived from online TV and video were at the heart of the dispute indicate just how important this sector has become."

The report predicts that U.S. over-the-top revenue will grow to $4.7 billion in 2013, compared with slightly more than $1 billion last year, while in the U.K., the $119 million market in 2007 will grow more than sevenfold to $842 million.

But the biggest growth rates are predicted to be in Japan, where the $57 million in 2007 revenue is forecast to hit $605 million in five years.

The biggest potential negative for broadcasters and content suppliers is the impact that online TV and video will have on their business models, but the report predicts that those companies that lead the online market will be "best-placed to avoid any harmful effects."
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