The Worldwide online video revenue is expected to eclipse US$4.5 billion by 2012, up from $1.2 billion in 2008, says In-Stat. Purchased/rented videos are expected to offer the most robust growth for online video in the near term, in large part due to an increase in subscription services such as Netflix, which charges a flat monthly fee to deliver an optimal combination of packaged goods and online content that can be viewed on home TV sets. Ad-supported professional video from major TV networks will become a strong revenue contributor by 2012.

Recent research by In-Stat found the following:

• By 2012, 39% of adults in the U.S. are expected to have purchased or rented online video.
• 54% of respondents to an In-Stat survey of U.S. consumers still favor physical discs when purchasing movies or TV shows.
• By 2012, In-Stat forecasts that 90% of U.S. households will have access to broadband, with 94% of these individuals watching online video.

The research, “World Report on Online Video”, covers the worldwide market for online video, including video rental/purchase, ad-supported TV programs, and ad-supported User Generated Video. The report presents an in-depth discussion of the market dynamics, as well as analysis of the various online video business models, and concludes that flat-rate pricing for a combination of packaged goods and online convenience is becoming the winning approach. It provides forecasts for broadband penetration, growth in online video viewers, and online video revenue for three categories through 2012. It also includes analysis of a recent In-Stat U.S. consumer survey on online video. An overview of U.S. online video providers is included.