Online video ad revenues to more than triple by 2020 – survey

April 3rd, 2012

UK television industry chiefs have predicted that advertising revenues from online video services will increase more than three-fold by 2020, according to research into new market opportunities for media companies.

As part of a wide-ranging study by media management company Red Bee Media, broadcasting executives were quizzed on their predictions for business models and revenue streams in 2020.

The Tomorrow Calling survey suggests a rosy future for the industry, with more than three-quarters (78 per cent) of respondents saying they felt the financial outlook was positive, with growth in both traditional TV and online video revenues. But it revealed a particularly bullish attitude towards online video as TV bosses expect ad revenues to rise 320 per cent in a decade.

Ad revenues will be boosted by a “content gold rush” by 2020 as traditional broadcasters compete with internet and technology companies for premium film and sports rights, the executives believe. Nearly three-fifths (57 per cent) think a tech giant such as Google, Apple or Samsung, will acquire a package of live rights to Premiership football. Just under half (46 per cent) predict YouTube will invest over £100 million on commissioning original video in the UK by 2020 and 59 per cent expect Sky to spend more on TV production in the UK than ITV.

However, two thirds believe that the growing influence of digital gatekeepers such as Apple, Google, Amazon and Facebook will be the most significant challenge facing their company.

Red Bee Media chief executive, Bill Patrizio, said media companies will have to fight hard and innovate in order to make the most of the market opportunities by 2020.

“If the last ten years have seen the convergence of broadcasting with broadband, it’s likely that the remainder of the coming decade will see a collision and competition between business models driven by consumer demand and expectation and changing patterns of media consumption,” he said.