It is estimated that the streaming media business segment will generate more than $78 billion in revenue in the United States over the next six years. That's a fat stack of cash!
The Insight Research Corp. recently released the results of an industry study which states that streaming media will be a major source of revenue through 2014. They classified streaming media as the transmission of digital audio and video files over an IP network or wireless network in real time or on-demand, while prohibiting users from storing the files locally.
For the next 5 years they predict that revenue from streaming media will grow at a rate of 27 percent per year thanks to more and more people turning to online audio and video. That means over 135% growth through 2014.
Robert Rosenberg, Insight Research president said that the growth is coming as traditional television advertising dollars are shunted into online ads.
"Over the past seven years as we've tracked the developments in streaming it has evolved from an esoteric niche to a mainstream market," says Robert Rosenberg, Insight Research president. "What we predicted way back when is coming to fruition. The advertising revenue that long supported traditional TV is gravitating to this new medium, putting downward pressure on traditional TV distribution schemes," Rosenberg concluded.
We know from previous research that some ad dollars have been moved into the arena from television but 27% per year seems quite extreme considering the state of the economy right now and the fact that many advertisers are still less than certain that online video ads will have an ROI.
Many online video ad campaigns are probably not going to show an ROI that makes it look worth getting into just yet and until we have some standardized way to comparing effectiveness of campaigns across multiple online video ad networks I think it's going to be a long uphill climb.