Video Downloads Already Reaching Critical Mass?

There was a time when it looked like the video downloads were going to be the future for Hollywood TV shows and movies, so I was shocked to read about a study from Forrester Research that said that while the US video download market was on track to triple this year to $279 million, that might be as big as it gets.

The reason: most people simply aren't interested in downloading programming on their computers because of the the ubiquity of DVDs and growing number of DVRs. Some industry observers had been thinking that devices like Apple TV would help increase interest, but "the people who pay to download video are extreme media-philes," said Forrester analyst James McQuivey. "They are not the tip of an iceberg. They may grow in their own spending, but there aren't many people like that left."

Forrester predicted that the number of people buying digital copies of movies or TV shows will only grow from 7 million to 11 million. As far as digital distribution goes, they projected that free, ad-supported video-on-demand and subscription based digital movies rentals will dominate. Most networks see ad-supported streaming, not paid downloads, as their focus moving forward. Speaking of which, the Wall Street Journal (sub. required) has a piece today about how CBS has decided to drastically alter its online strategy (an annoucement that coincides with the upfronts, where advertisers take a look at the networks' fall programming decide where to spend around $9 billion total):

CBS, after a year of experimenting with various Web initiatives, says that forcing consumers to come to one site -- its own -- to view video hasn't worked. Instead, the company plans to pursue a drastically revised strategy that involves syndicating its entertainment, news and sports video to as much of the Web as possible. It represents a stark departure for the TV industry. Most of CBS's major competitors, including Walt Disney Co.'s ABC, General Electric Co.'s NBC Universal and News Corp.'s Fox, are to some degree all betting that they can build their own Internet video portals.