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Close to 25 billion media streams were shown in 2006, according to a new report by Accustream iMedia Research. The study focused on all entertainment and media sites, including ad-supported and subscription services. It did not include user-generated video.

Video Streams And Ads

The average user watched 10.6 streams per month per site in 2006, not including streamed video ads. This was an 11 percent decline from 2005 because of increased competition from the growing number of content providers. Interestingly people visited more sites but watched fewer streams on each.

Music videos accounted for 36 percent of total streams, while news streams made up 24 percent. Streaming increased because of more quality content available to watch according to Paul A. Palumbo of AccuStream. He also cited "old-fashioned syndication relationships with aggregators who can deliver audiences and began to populate emerging distribution platforms. Moreover, a growing base of high speed users and the adoption of Flash propelled the market."

A study by Insight Express carried out for Advertising.com found that news and video streams were the most popular types of content for viewers. News clips were favored by 48 percent of respondents, followed closely by music videos, which were preferred by 47 percent. Movie trailers rounded out the top three with 32 percent finding them appealing.

While ads pay for some of the content that drove streaming growth last year, eMarketer senior analyst David Hallerman believes that the market for streaming ads may have built in limits. "The current video ad inventory shortages both create higher CPMs and hold back a fuller flourishing of this market," said Mr. Hallerman.

A June 2006 McKinsey & Co. report found that Internet video advertising was 80 percent sold out in 2005. "Assuming that marketers don't increase the number of ads they place in each video stream, the maximum supply of video ads is currently about $600 million a year - far less than future demand," noted the consulting firm.

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