Bad news for the investors who have poured $8 billion into Web video over the past three years: The market just got a whole lot smaller.
Or at least it has according to eMarketer. In February, the Web prognosticator said YouTube et al would sell $1.4 billion in ads in the U.S. this year. Now its says it was overzealous: It has ratcheted its estimate back by 64%, to $505 million.
What’s happened since then? eMarketer blamed “changes in methodology” at the Interactive Advertising Bureau to MediaWeek. But in his new report, analyst David Hallernan says advertisers remain tentative and still confused on what types of video to buy and where. In other words: You got us.
We’re generally sceptical about any Web sales projection, because we still remember the ones we heard in the last boom. And we’re definitely used to hearing those projections revised downward as reality intrudes: eMarketer itself has already cut its overall online ad estimates twice this year.
But for what it’s worth, here’s how a $505 million market would break down this year:
- YouTube says it will generate $200 million in advertising in 2008.
- We’ve estimated that Hulu will sell as much as $90 million.
That means the remaining $215 million, then, is divided between the following:
- Big media companies like ABC/Disney, CBS, Time Warner, Yahoo, News Corp/MySpace, NBC U, and Viacom.
- Video aggregators like Veoh, Joost, Metacafe and DailyMotion
- And ad networks like Brightroll, Tremor, Husky and Broadband Enterprises
Theories? Leave them in comments.
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