Product Type: Market Research Report
Published by: Mintel International Group Ltd.
Published: October 2007
Product Code: R560-2973Description The rise of the Internet has created dramatic changes in how consumers find, receive, enjoy and create media content. The ability to easily upload, store and share content has already transformed the music industry, and the rise of broadband connections is beginning to transform video as well.
In this report, Mintel examines industry players; key market drivers and trends; and consumer behavior and attitudes in order to provide conclusions on the current direction of the industry. Mintel also makes recommendations for successful future business strategies.
Specifically, this report discusses:
- User needs and profiles. Internet and portable video usage patterns, consumer attitudes, and spending patterns are reviewed, based on exclusive consumer research conducted by Mintel.
- Industry players and business models. Key players and emerging business models are discussed, including free content, ad-supported models, paid downloads, streams and subscriptions. Advertising and promotional strategies are also reviewed.
- Content issues, including quality, availability and access. Broadband access is an important factor for long-form content such as TV episodes. Image quality and the availability of different types of content are other important drivers. Types of online and downloadable video of interest to users are discussed.
- Consumer behavior models. Whether online and downloadable video will be primarily viewed on PCs or televisions is one topic of active debate in the industry. Drawing on its exclusive consumer surveys, Mintel provides conclusions about what models will be most popular.
- Future business models. Mintel predicts which business models are most likely to succeed. Also discussed are recommendations for staying ahead of the curve and meeting consumer needs.
For the purposes of this report, online and downloadable video refers to video content that is either downloaded or played from a remote source (streamed) via the Internet or wireless networks. Not included is content transmitted by cable companies or other providers through non-Internet networks such as “on demand” or pay-per-view programming. However, this content is discussed when relevant to Internet and cellular delivery of content.
Table of Contents - Scope and Themes
- What you need to know
- Definition
- Abbreviations and terms
- Terms
- Target audience segmentation
- Executive Summary
- Young industry already competing with traditional media
- The living room is still favored for long-form content
- For-pay and portable video lag behind free content online
- Future income models to follow traditional media conventions
- Where you want it, when you want it drives the market
- Crowded arena is expected to thin out
- Quality issues suggest continued competition from cable boxes
- Viral marketing king for now; promotions to become more relevant
- Providing an alternative to piracy
- A brief overview of the near-term future
- Market Drivers
- Competition for disposable time
- Figure 1: U.S. Penetration of leading media technologies, 2005 and 2007
- Figure 2: Hours of media usage per week, August 2006
- Where you want it, when you want it
- Figure 3: Reasons for purchasing DVR, August 2006
- Figure 4: Uses for downloaded video, August 2007
- The world’s greatest video library
- Interest in short content
- Free content
- Current Usage
- Free online content
- Figure 5: Usage of free downloadable and streaming video, on PCs and portable devices, by age, August 2007
- Time spent watching free streaming video
- Figure 6: Time spent watching streaming video, on a PC, by key demographics, August 2007
- Number of free videos downloaded
- Figure 7: Number of free videos downloaded in the last month, by key demographics, August 2007
- Fee-based online content
- Figure 8: Usage of paid downloadable and streaming video, on PCs, by key demographics, August 2007
- Paid video usage on portable platforms
- Figure 9: Usage of paid downloadable and streaming video on portable devices, by key demographics, August 2007
- Pricing parameters and spending behavior
- Figure 10: Attitudes to paying for online video downloads and rentals, August 2007
- Spend on online video
- Figure 11: Spending on video downloads, streams and subscriptions, PC and portable platforms, August 2007
- Attitudes toward ownership
- Conclusions
- Industry Overview
- Introduction
- Peer-to-peer (P2P)
- Traditional content
- Online specialists
- Figure 12: Leading U.S. video streaming sites, March 2007
- Wireless
- Hardware companies
- Pure-play online video rental/download sites
- Figure 13: Overview of leading video rental/download sites, 2007
- Popularity of individual vendors
- Figure 14: Online video streaming/downloading services used, August 2007
- Figure 15: Online video streaming/downloading services used, by age, August 2007
- Figure 16: Online video streaming/downloading services used, by household income, August 2007
- Conclusions
- Content Quality, Access and Preferences
- Issues regarding content quality
- User attitudes
- Impact of HD adoption
- Figure 17: Household HDTV penetration, 2002-06
- Content access
- Figure 18: U.S. households with broadband and dial-up access, 2003-07
- Wireless access
- Content Preferences when Viewing Video on PCs
- Entertainment content
- Figure 19: Entertainment-oriented video viewed on PC, by gender, August 2007
- Figure 20: Entertainment-oriented video viewed on PC, by age, August 2007
- Figure 21: Entertainment-oriented video viewed on PC, by race/ethnicity, August 2007
- News and non-fiction content
- Figure 22: News/non-fiction-oriented video viewed on PC, by gender, August 2007
- Figure 23: News/non-fiction-oriented video viewed on PC, by age, August 2007
- Figure 24: News/non-fiction-oriented video viewed on PC, by race/ethnicity, August 2007
- Music videos, amateur videos, ads, adult content, and more
- Figure 25: Other types of video viewed on a PC, by gender, August2007
- Figure 26: Other types of video viewed on a PC, by age, August2007
- Figure 27: Other types of video viewed on a PC, by household income, August2007
- Figure 28: Other types of video viewed on a PC, by race/ethnicity, August2007
- Strong audiences for free, current, branded video
- Advertising and Promotion
- Introduction
- Television advertising
- Websites
- Promotions
- Viral marketing and passthrough
- Figure 29: Interest in videos sent by friends, by key demographics, August 2007
- Piracy and DRM
- Introduction
- Lessons learned from the music industry
- Figure 30: U.S. music manufacturer industry revenues, 2001-06
- Enforcement efforts have an impact
- Providing a legal alternative prevents piracy
- Lasting change to industry revenue models
- Consumer attitudes on P2P video downloads
- Figure 31: Consumers who don’t think P2P downloads are wrong, by key demographics, August 2007
- Figure 32: Interest in free P2P vs. paid downloads, by key demographics, August 2007
- Strategies for online and downloadable video
- Increase fear of piracy
- Creating the right value proposition
- Figure 33: Interest in DVD features and extras, by key demographics, August 2007
- Create the right DRM system
- Devices and Viewing Behavior
- Interest in PC vs. TV viewing
- Figure 34: Consumer attitudes on PC vs. TV viewing, August 2007
- Figure 35: Consumer attitudes on PC vs. TV viewing, by age, August 2007
- Figure 36: Consumer attitudes on PC vs. TV viewing, by race/ethnicity, August 2007
- Access to versatile viewing equipment
- Figure 37: Access to versatile viewing equipment, by gender, August 2007
- Figure 38: Access to versatile viewing equipment, by age, August 2007
- Figure 39: Access to versatile viewing equipment, by race/ethnicity, August 2007
- Attitudes toward portable screen viewing
- Figure 40: Attitudes toward portable screen viewing, by key demographics, August 2007
- Connecting the last 12-feet remains a challenge
- The Future
- Traditional providers retain an advantage
- No room in the middle
- The importance of exclusivity
- More lunges at the living room screen necessary
- Video to go offers more near-term promise
- The need for standards
- Different models for different content
- Rent vs. own vs. subscribe
- Subscriptions and product placement in mobile platforms
- The next iTunes
- Appendix: Trade Associations
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