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Online Video Offerings to Accelerate in 2007

Online sales of TV shows, movies and other prerecorded video will become a billion-dollar business in 2007, predicts a new report from technology research firm Strategy Analytics.

Their report predicts that while video download sales made through Apple's iTunes store and other sources will total just $298 million this year, by the end of 2007 the market will grow to $1.5 billion. By 2010, global revenue from online video sales, rentals and subscriptions will surge to $5.9 billion, and account for eight percent of total home video industry revenues.

"2007 will be remembered as the year in which online sales of prerecorded video finally become a real business," comments the report's author, Martin Olausson, Senior Analyst from the Strategy Analytics Broadband Media & Communications service. "Just like with music, online delivery of video content is now emerging as a viable and increasingly important distribution channel for content owners."

Along with broadband growth and consumer demand, online video sales will also be spurred by a growing number of distributors and payment models. While Apple's iTunes store is the leading source for paid video downloads today, other major players such as Wal-Mart, Time Warner, and NetFlix are expected to enter the market in the near future.

Although pay-to-own downloads account for most online video revenues today, other payment models will become a significant part of the market over time. By 2010, Strategy Analytics projects that rentals and subscription-based services will account for about one quarter of annual online video sales to consumers.

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