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Annual U.S. Internet Video Services Forecast

Annual U.S. revenues from Internet video services -- spanning user-generated content to television shows and movies -- will exceed $7 billion by 2010, according to Parks Associates.

Their research report also notes this growth will accompany an ongoing shift toward greater parity between the revenue sources. In 2007, approximately 85 percent of revenue will be from advertisements attached to user-generated content and television and news streams. By 2010, services for renting and downloading TV shows and movies will account for nearly 40 percent of total revenues.

"Major broadcasters, movie studios, retailers, and content aggregators are all experimenting with new ways to distribute video content online and attach advertising to their offerings," said Kurt Scherf, vice president and principal analyst, Parks Associates. "The early results are quite promising."

According to Parks, online distribution has boosted viewership and advertising revenues for current prime-time U.S. television offerings and serves a strong differentiator in an increasingly fragmented market.

Their report encourages content creators to capitalize further on this trend by working closely with Websites that specialize in user-generated video and social networking. Parks believes that the 'active users' of these portals will be the early buyers for Internet video content.

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