Digital media spend on the rise

Consumer spend on digital content, including video, gaming and music will reach nearly US$52 billion (€36 billion) by 2014.

According to Futuresource Consulting, an estimated 400 billion videos were watched online last year in the US, most of which were viewed for free via services including YouTube and Hulu.

In Western Europe, paid for online video accounted for just 2% of total video spend and 5% in the US, but the market is expected to increase to 12% and 16% respectively by 2014.

According to Futuresource senior analyst Mai Hoang, packaged media sales are declining but are still significant. “In 2010, packaged video generated US$42 billion globally, and although decline is apparent in the video industry, packaged will continue to produce significant revenues in the coming years, with spend still at US$33 billion in 2014, accounting for 72% of total consumer spend,” Hoang said. While Blu-ray is gaining traction, the format will not be enough to compensate for the decline in DVD.

According to Futuresource growth in the home entertainment industry will need to come from digital content distribution, although it points out that challenges remain, including the wide availability of free online content and the consumption of illegal video.

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