Consumption of both ad-supported and pay broadband video will grow strongly over the next few years as direct and third party distribution channels proliferate to give consumers more ways to access the content, according to a new study from ABI Research. The growing reach of new distribution models will expand the total consumer base of Internet video consumers from roughly 300 million today to nearly one billion by 2012. This growth will create a demand for new and evolved monetization models that will help create a multi-billion dollar industry in coming years.

“Who pays for video online will largely be determined by who foots the bill through existing models,” says research director Michael Wolf. “For broadcast television, including prime-time TV content, we anticipate that ad support will be the primary engine of monetization as this content moves online. Movie content new to the home video window will be largely consumer pay-supported. User-generated content will be ad-supported, as sites such as YouTube and social networking sites make increasing use of content produced by their own online users as a way to drastically increase their inventory of premium advertising opportunities.”

The expanding reach of new syndication networks and video “super-portals” such as Joost, alongside established sites like MySpace, will rapidly grow the total user base for ad-supported video.

“We believe that pay-video adoption will grow through sites such as iTunes where consumer hardware platforms create end-to-end user experiences that enable easy access to premium video,” said Wolf. “The growth of Internet-connected hardware platforms will make direct-download of Internet video to the TV a viable model in coming years.”

ABI Research also sees significant growth for enabling back-end services such as content management, publishing and CDN services. Emerging broadband video ASPs such as Brightcove are offering not only comprehensive hosted software solutions, but tie-ins to their own ad and syndication networks. Further, network acceleration overlay players such as BitTorrent and Swarmcast offer additional ways to create economical distribution methods that are already forcing traditional CDNs to adjust their models beyond distributed server-based caching.

The new ABI Research report, “Broadband Video and Internet TV” examines every aspect of the online video market including consumer adoption of Internet video, and the back-end enabling service providers in the BBV ASP, CDN and ad-network markets. It also explores the different business models for online video. It forms part of three ABI Research Services, Digital Media, Home Networking, and Multi-Channel Video.