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Research group calls paid downloads a "dead end"

14 May 2007 13:42 by Andre "DVDBack23" Yoskowitz | 5 comments

In a new report by Forrester Research, analyst James McQuivey has called paid downloads and the Apple TV a "dead end", explaining that as more programming becomes free, consumers will swarm to that model even if they are forced to watch advertisements.

McQuivey thinks the "dead end" can get here as soon as 2008 even though the paid download market continues to grow. He expects sales to increase from $98 million USD to $279 million USD by the end of this year but he sees growth slowing to a crawl after that. He attributes all the growth to early-adopters and points out that only 9 percent of adults have paid for any type of video content online and that the tail end of early adopter sales is approaching. "Free TV streams will steal eyeshare back from paid downloads," says the report.

If this report is to be believed then Amazon Unbox, MovieLink and other paid programs are in trouble. iTunes will hit the "dead end" later due to its postition as #1 in paid downloads according to the report.

The group also specifically notes Joost as a major threat to the whole concept of paid downloads. Joost has recently raised $45 million USD and gotten content from CBS and Viacom among others. Forrester questions: "With all the top networks putting up free content at such high quality, why would people pay for downloads?"

You must admit, they have a point.

Source:
Arstechnica

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Discuss this article!
borhan9 (AfterDawn Addict) 14 May 2007 18:12
Companies want to get a piece of the pi and make more money just make it free with revenue coming from aD's and then you will see how many people get into it. [ + quote]
ZippyDSM (AfterDawn Addict) 14 May 2007 18:45
no one will pay 3$ a song when they figure out how to price things reasonably thats when they wont go belly up from a lack of interest. Ad rev is only so helpful altho tis like the snake eating itself with the consumer gettign all the goodies from it. 25cents a song a buck for new and about twice as much for movies these are prices people will flock to it. [ + quote]
themind (Junior Member) 15 May 2007 2:17
I flock to abc.com its free and its good and it starts when im ready. No more running to the tv to see Lost. :) [ + quote]
Unfocused (Member) 15 May 2007 21:22
Right on for ABC.Com. Lost is available the next day for free. That show is worse than crack. I need my weekly fix. [ + quote]
scorpNZ (Senior Member) 15 May 2007 21:56
WHAT aint that show finished yet,man the buggers have figured out how to put a soap in new clothing :p [ + quote]