Streaming media sector to hit US$3.7b in 2007

The streaming media service market is expected to grow from US$600 million today to US$3.7 billion in 2007, said analyst and consulting company Ovum.

SINGAPORE--The streaming media service market is expected to grow from US$600 million today to US$3.7 billion in 2007, said analyst and consulting company Ovum.

In its latest report, Streaming Media: Commercial Opportunities, Ovum also predicted that revenues for adult entertainment will hit US$5.8 billion in 2007, from US$700 million today.

However, Ovum believes that the dominance of pornography would not last in the long run, as advances in compression technology and increased broadband Internet Protocol (IP) services will greatly contribute to the development of enterprise applications of streaming media.

The drive toward commercial applications of streaming media is aided by improvements to infrastructure and software, Ovum stated. Streaming media would be used by enterprises to hold virtual meetings and disseminate company-wide briefings on an international basis. Travel costs can be effectively reduced this way.

"Streaming media has moved beyond a corporate fad, to a point where companies can see the real benefits of the services," said Ovum analyst Dario Betti. "Commercial streaming media services will go from strength to strength as infrastructure and software are further developed to ensure high-quality, user-friendly services."

Consumer services are predicted to appear late, as they represent lower revenue opportunities for service providers. The huge costs of streaming an event online, coupled with the small number of people willing to pay for the offering, makes segmenting consumer content difficult.

"Even when content issues have been sorted out, there needs to be a choice of technology--people must be offered a range of compression formats so that users with higher-speed access can select a higher-quality stream," explained Betti.

Ovum predicts that consumer video-on-demand will reach US$4.9 billion by 2007, while mobile streaming applications will total US$7.9 billion. However, the money still lies in the business sector.

"Companies providing streaming media services are best positioned to aim at the business market with transferable generic services and content, rather than the unpredictable and largely unprofitable consumer market," Betti said.