Study: Streaming Media Marketing to Rake in $3.1 Billion in 2005

Streaming media looks to be the hot sector of the moment — and the next several years — with a new study suggesting the industry will reach $3.1 billion in revenue by 2005, according to the Yankee Group.

The Boston-based technology and strategy consultancy is pegging streaming media to grow exponentially during the next four years — due in large part to broadband’s expansion into the residential sector.

As a result, the company said it expects spending on streaming media-enabled advertising will boom nearly sevenfold by 2005, from $44 million in 2000.

As more and more homes receive broadband connections, marketers will turn to increasingly bandwidth-intensive online marketing to deliver their messages to consumers.

But importantly, in addition to in-stream ads, Yankee also counts streaming product information as an up-and-coming segment of the industry.

On the consumer front, online video and audio will spur development of “on-demand marketing,” potentially allowing consumers to retrieve advertising messages — in the form of multimedia product information — when they’re ready to buy.

“Broadband Web users looking to research major purchases will be able to tap into a broad array of videos providing information on cars, computers, vacations, and other big-ticket items,” said Yankee Group analyst Steve Vonder Haar. “This is multimedia content that helps people get things done. It represents how the Web is best suited for delivering video with a purpose rather than video for couch potatoes.”

According to Yankee, as this type of information-on-demand becomes a lucrative proposition for marketers, they’ll dump increasing dollars into the coffers of streaming media ad and technology firms.

To an extent, that’s happening already. Yahoo!, for one, recently said it plans to make its streaming media services available on a B2B basis, for corporate marketers, communications and salespeople. Microsoft’s MSN portal and MSNBC.com (a joint venture with NBC) will both use a Web-based media player that it said could be used as an investor relations, promotional or corporate communications tool.

Both companies said they expect such efforts to become sizable money-makers.

Initially, Yankee said it expects (and recommends) that companies experiment with using their existing promotional videos to create low-cost streaming media marketing campaigns.

The Yankee report follows a spate of recent announcements from the streaming media sector. In addition to the Yahoo! and MSN developments, streaming media player EyeWonder has been expanding its reach with deals with iWon.com and ad network Engage.

And earlier this month, another analyst group looked at the number of streaming media outlets versus the number of those actually inserting ads — and found sizable room for improvement. As a result, analysts from DFC Intelligence likened the streaming media advertising sector to cable television, which went from $50 million in revenue in 1980 to $13 billion in 2001, they said.