Web 3.0 & Online Movies (Part 3)

Business Model

Online Movie sites earn money mostly from advertisements, subscriptions and charges for movie rentals and download. Movie download revenues are forecasted to be $60 million in 2007, up from 133.4% in 2006. Movie download revenues are forecasted to cross $100 million in 2008.

The online advertising industry is fast realizing the potential of the online movie industry and analysts are expecting a surge in advertisements on the various movie sites. A large chunk of this advertising dollar is expected from the various Hollywood studios that are forecasted to increase their online spending from $225 million in 2006 to $298 million 2007 and over $450 million in 2009.

According to eMarketer, US consumer spending on digital music, movies and television will touch $7.8 billion in 2010, up from $1.3 billion in 2005. Nielsen//NetRatings forecasts Walt Disney Corporation, Viacom, General Electric, Time Warner, etc. to be the top advertisers for online movie sites in the current year.

Rentals for Netflix start at $4.99 for and goes up to $23.99. CinemaNow provides online movie downloads and the rates vary from $3.99 to $9.99. The subscription rate for Platinum Club of CinemaNow is $29.95 per month or $99.95 for a year. At Blockbuster, the popular online DVD rental plan starts from $4.99 and goes up to $24.99. iTunes provides movie downloads for $9.99 to $14.99.

SeventyMM is an upcoming movie rental service in India and it offers about 10,000 titles to residents living in Delhi and Bangalore. The subscription rates starts from $5 per month.

(To Be Continued)

[Part 1]
[Part 2]

This segment is part 3 in the series : Web 3.0 & Online Movies
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