Online Video Poised to Weather Hard Times
October 8, 2008 11:54 AM
In the midst of the economic crisis, we might cut back on dinners out, see fewer movies or buy generic brands at the grocery store. But we’re not likely to cut the cord on our high-speed Internet.
So the online video business may be able to take some comfort that it can weather the downturn. That’s the conclusion of Will Richmond, industry analyst at VideoNuze.com.
He pointed out that a Jupiter study reported that only 2% of consumers would cut off their Internet service to reduce expenses during tough times. As consumers do rein in spending in other areas, the ad-supported model for online video becomes more attractive, he said. “Some will counter that advertising spending always contracts in tough times, so relying on ads is no sanctuary. True enough, but my sense is that in this downturn, with the cost of so many essential goods (food, gas, health care, etc.) going up, any ad spending downturn may seem modest compared to the downturn in consumer discretionary spending,” he wrote this week.
What do you think? Will ads stay steady in online video?