Movie Downloads To Reach $720 Million
The market for movie downloads will hit $720 million in 2011 in the U.S. according to Screen Digest’s "Online Movie Strategies: Competitive Review and Market Outlook" report. Content owners and studios will take in $530 million of that revenue and service providers including Amazon, Apple and Netflix will have whats left over.
"People want to watch films they’ve downloaded on their large screen televisions and home entertainment systems," said Arash Amel, Screen Digest senior analyst.
"To do that, they need a device which can link their broadband connection to the TV," Mr. Amel said. "It will take time to reach a wider market penetration with these new devices, and we believe that this will start to become more mainstream beyond 2011."
Screen Digest estimates that studio wholesale prices on movie downloads to service providers are from 70 percent to 105 percent of what consumers pay.
This makes movie downloads a low-margin business. While Apple has promoted music downloading to sell iPods, so may other hardware makers benefit from movie downloads as much as studios.
Other projections of U.S. movie download revenues include an AccuStream iMedia Research study that put the 2007 figures at $60 million, and an Emerging Media Dynamics estimate that says revenues of $534 million in 2010, up form $37 million in 2005.