Online Video Streaming Toward Profits

To call online videos big would be an understatement. Video streaming has become engrained in our everyday lives, whether one is watching videos on YouTube (News - Alert), TV shows on Hulu, or movies on Netflix. A single video can spread across the world, bringing one fame or infamy. So how much is this fascinating market worth? Well, according to the forecasts from Informa Telecoms & Media (News - Alert), the online video market will be worth $37 billion by 2017.

While online video is so important, it’s also typically free. While there are paid services such as Crunchyroll and Netflix, free video sites outnumber them and are more commonly used. Many sites offer free accounts with the option of upgrading to a paid one, where they can watch full episodes with no commercials. For the many that prefer to watch videos for free, there are brief advertisements before videos (and sometimes in the middle, depending on the video’s length).


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As such, online video only accounts for a small portion of total TV and video revenue. By 2017, Informa estimates that it will account for eight percent of it, while reaching over 10 percent by the end of the decade. The growth will be driven by publishers and operators monetizing content on devices beyond computers, as well as live online video content, advertisements, and pay-TV operators.

The U.S. currently dominates the global market for online videos, but the gap will close over the years. Still, by 2017, it will contribute only slightly more than half of all revenue, with Europe and Asia growing quickly. Advertising will remain the biggest source of income, although paid subscriptions will continue to grow.

“It’s clear that online video, today, is worth much more than the digital cents and dimes of yore, and is attracting real, and growing, revenues,” says Giles Cottle, author of “OTT Video Revenue Forcasts” and principal analyst at Informa. “But this value is concentrated around a select few players. We estimate that Apple, Google (News - Alert), Netflix and the global broadcasters (including Hulu), combined, account for about 70% of all online video revenue today– so if you aren’t one of these players, then the chances are you aren’t making a great deal of money from online delivery today.”

Online video has been around too long to call it “the wave of the future,” but there’s still a lot ahead for it. As streaming becomes faster, more content becomes available, and people find more ways to profit from their content online, the market will continue to grow.