Online TV revenues to increase tenfold.

New research from Informa Telecoms & Media shows that legitimate online TV and video services will generate revenues of US$6.3 billion in 2012, almost ten times the 2006 figure. Advertising will consistently outperform a la carte and subscription-based services in terms of revenue generation and North America will be the largest revenue-generating region, accounting for 65% of the 2012 global total.

Informa’s Online TV and Video: Beyond User-Generated Content report, published today, has found that the trend towards online TV and video is symptomatic of wider cultural changes. A new ‘breed’ of consumers has emerged who find it difficult to align themselves with the passive model of traditional linear TV.

Simon Dyson, co-author of the report said “the TV business has already acknowledged some of the changes and is pushing concepts such as on-demand and digital video recorders. The rise of online TV and video is another step that tips the balance of power towards the consumer.”

While the Internet has long been considered a technology of the future for film and TV executives, it is now having a measurable impact on traditional sectors, indicating its time has come. Digital media is changing the consumption of TV from ‘on-the-couch’ to a ‘watch anywhere’ activity. Content has become interactive rather than passive, with the emergence of ‘citizen media’ concepts, such as blogs and social networks.

According to Adam Thomas, Media Research Manager at Informa, “these trends are now so pronounced, that the term ‘social revolution’ no longer seems too much of an exaggeration. With social change occurring on such a large scale, traditional media companies are being forced to change their behaviour and business models to adapt their offering to consumer demand. The challenge for the TV industry is to monetise this massive interest in online content.”

The biggest negative for broadcasters and content suppliers is the potential for online TV and video to hurt their existing business models. To date its harmful impact has been limited and there are examples of a beneficial affect, with CBS and NBC both reporting improved TV ratings for programmes showcased online.