According to a recent Strategy Analytics webinar, paid video will overtake free video online this year. Digital media analyst Martin Olausson believes that it will top it by about $800 million before the year ends.

He states that paid video will reach $3.8B while free video will only reach $3.5B and that growth will continue at an annual rate of 38% into 2012. Martin also said that he believes free video will grow at 37% per year in the same period while paid will grow at 39%.

"The economic downturn and diminishing advertising budgets have increased the focus on consumer paid content on the web in the last six months," said Martin Olausson, Director of Digital Media Research at Strategy Analytics. "Increased consumer awareness and uptake of services, such as Netflix WatchNow and Xbox Live Video Store, in combination with new services such as the TV Everywhere initiative announced by Comcast and Time Warner Cable will also help drive the paid online video segment in the coming years.‚ÄĚ

What do you think?

Here's the link to the 21st Century Consumers & the Future of Digital Media webinar.