(2 July 2009 6:15 pm)

MUMBAI: US-based online ad-supported TV in the US will grow to $1.45 billion in 2013 from $448 million in 2008, reveals a research report conducted by Screen Digest.

The online ad-supported TV, however, will fail to offset a total decline in TV advertising, the study states.

The online web-based TV services of the four major US TV networks – ABC Full Episode Player, CBS Audience Network, NBC.com and Fox.com – together with Hulu, the joint venture between NBC Universal, News Corp and Disney, accounted for a combined 53 per cent of an ad-supported US online TV market.

This generated $448 million in revenues last year. The remaining share of revenues was made up of the online video services of major sports leagues, video services from traditional online portals and direct services from other major channel groups and content owners.

The report findings also state that the combined dominance of the leading broadcaster-supported platforms will drive the total ad-supported model for the distribution of online entertainment programming, news, sports and events in the US to more than $1.45 billion in revenues by 2013.

In contrast, third party platforms such as YouTube, Joost and other portals, which have no direct vertical affiliation with major rights holders nor direct access to premium content rights, will struggle to aggregate ad-supported movies and TV shows. The Hollywood studios and major rights holders will continue to limit such deals, instead preferring to build their own syndicated ad-supported online video services – such as Crackle, developed by Sony Pictures, and the CBS Audience Network.

This is a trend that will gather momentum. As a result, third party ad-supported video platforms may have to either diversify into new forms of their own original programming, exit the content aggregation business and offer technology and advertising solutions to the content-owners' and broadcasters' own services, or settle on the low-margin business of becoming affiliates of the player-platforms distributed by the content rights holders themselves.