Online video sales have no future. That's according to a study conducted by Forrester Research . The company says that because internet users have the opportunity to watch free ad-supported content, paying for digital video will die a death.
"In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They're already coming," said Forrester Research analyst James McQuivey.
McQuivey described the pay-per-download video market as a dead end. "Free is going to win," he said.
Apple's iTunes store is currently the largest online vendor of video downloads. Its worldwide revenue is expected to be worth £140m this year, up from just £50m in 2006. Forrest Research says that 2007 will be the last year that these figures grow, and that advertising-supported content will begin to take over.
Many of the American TV networks are now offering US viewers the chance to watch shows online for free. Advertising funds such services, just like it does for TV broadcasts. Terrestrial broadcasters in the UK are also starting up video on demand (VOD) services, with commercial channels funding the ventures again through advertising.
The increasing popularity of this method of content delivery adds weight to Forrester Research's predictions that pay-per-download services' days are numbered.