Online Entertainment Industry Poised for Growth
Mainstream entertainment with content specifically designed for the Internet will
proliferate substantially in the next year, according to the results of a jointly
conducted online poll of Web viewers by Gemini Consulting and Honkworm
International.
Internet content called "webisodes" (which exclude games, Internet TV, and adult
entertainment) will be viewed by a larger base of Web users on a more regular basis,
for longer periods of time. More than three-quarters of US Internet users have
already watched entertainment on the Internet, a figure that will grow to a penetration
of more than 90 percent by the end of 2000, according to the study. The size of the
online entertainment market will grow 64 percent to $1.8 billion by the end of 2000,
up from $1.1 billion in 1999. Approximately 29 percent of viewers who have tuned
in to "webisodes" have actively sought out such programming. Most of the viewers,
64 percent, come across online entertainment programming through random surfing.
"This tells us that online entertainment is already significant but that the market is still fragmented and not yet
mature enough to represent repeat traffic," said Johan Liedgren, CEO, founder and chairman of Honkworm
International. "But the market is quickly establishing destination sites to make content more accessible. Viewers
will make shorter-format entertainment part of their daily routine in the office,like a coffee break, where they
have access to higher bandwidth. We will see explosive growth fuelling fundamental changes in a very
traditional industry."
Web users who watch online entertainment programming so far have not stayed tuned in for long./
Approximately 60 percent have tuned in for 1 to 3 minutes, and, on average, one in five watch "webisodes" for
more than three minutes.
"This billion-dollar market is trying to find its forms," said David Ridemar, head of Gemini Consultings
strategic research group. "Think about the impact on the online entertainment marketplace when marketing kicks
in, and random viewers start coming back for repeat visits. Then this market will experience three-digit
growth."
Today, almost 90 percent of online entertainment viewers watch from home, the study found. Fewer than 8
percent tune in from the office, although the segment of viewers watching from the office is expected to grow
the fastest in the coming years.
"There is a market forming in front of our eyes," Ridemar said. "Online entertainment is becoming increasingly
mainstream, but industry players are struggling to find a business model."
The maturation of the online entertainment industry has ramifications for the advertising side of the Internet
industry, as well as the content side.
"The demise of the ad banner paves the way for more creative sponsorship models where content providers and
advertisers work closely together," Liedgren said. "The entrenched network and advertising players have been
put on notice that the Internet is changing the nature of entertainment programming and associated business
models."
February 16, 2000
cyberatlas.internet.com |
