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Online Video Industry Forecast 2012: Digital One/ClickStream

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[This sponsored article appeared in the December 2011/January 2012 issue of Streaming Media magazine.]

A recent survey by Retrevo found that 83% of adults under 25 watch most of their TV programming online. The convenience of pulling up desired programming on any desktop, laptop, smart phone, or mobile app has led to viewers dropping cable fees in favor of online services at a fraction of the cost, with the option to watch whenever they want.

The shift from ad-based monetization to the more profitable subscription/pay-per-view will continue to gain momentum as small business realizes the full potential of the technology and looks at the website as a source of revenue rather than as an expense.

Making money from a website is not a new idea, but the ad-based concept that has generated little revenue for all but a select few is giving way to the much more profitable subscription/pay-per-view business model.

Consider the subscription model from ClickStreamTV used by PBS artist Jerry Yarnell. Mr. Yarnell's site offers sample videos to attract prospective students into a $25 a month subscription. An average of 500 subscribers hitting his site per month earns $150,000.00 a year.

Using the current Google model of $.75 per 1,000 views, Mr. Yarnell would need over 200 million viewers a year (or 16.6 million a month) to generate the revenue brought in by just 500 subscribers.

Like broadcast TV before it, I believe streaming video will evolve into the more streamlined and profitable PPV and subscription models in 2012.


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