I just about fell off my chair when I saw Forrester predicting the death of online video sales:

"In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They're already coming," said Forrester Research analyst James McQuivey, the author of the study, who also called the paid download video market a "dead end."

Umm, sure. Let's see... I can watch free content streamed on my PC with ads, or I can buy an AppleTV or an XBox360 and watch on that big screen I invested in. Furthermore, I can carry the video content with me that way (iPod or Zune, respectively). With the free services? I get to watch on my PC, not transfer it anywhere, and have the devil's own time getting it to display on my big TV.

There's also a cultural shift this guy isn't noticing - my daughter and her friends seem much happier to download video (and watch on their iPods) than to stream the video (with ads). The other thing missed by Forrester: the iTunes model has much better support for narrow-casting than does the broadcast ad supported one. I expect to see things sliding toward subscription and away from the broadcast ad model over time - simply because the generic ads are so poorly targeted. I expect to see ad supported subscriptions via iTunes (and similar services) winning, and the broadcast model losing.

I'd recommend this podcast by Glenn and Helen Reynolds for more on this topic.

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