Consumers Finally Ready to Join Video Subscription Services via the Internet Reports In-Stat/MDR.

Business Editors/High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Sept. 22, 2003

According to recent In-Stat/MDR (http://www.instat.com) research, the market for consumer online subscription video streaming services will grow from about $991 million during 2003, up to more than $4.5 billion during 2007. The high-tech market research firm expects that Asia will be the largest market in 2007, at about $1.2 billion and also predicts that solid growth will occur in Europe. "The world of online content is undergoing a three-way metamorphosis, creating opportunities for major media companies and large service providers to finally get their fingers into the Internet revenue pie," said Gerry Kaufhold, a principal analyst with In-Stat/MDR.

A recent In-Stat/MDR report identifies the following three phenomena that are enabling the online subscription video streaming revolution:

-- Lots of people are hooking up at high-speed -- more than 30

million households are already hooked up to high-speed

Internet connections, and In-Stat/MDR expects that more than

130 million households will be connected by the end of 2007.

All of these people are cruising at high speed and will be

getting used to having high-quality streaming video content

coming into their homes via the Internet.

-- People are finally starting to pay for premium content --

during the recent war with Iraq, RealNetworks RealOne

SuperPass service experienced an upward spike in

subscriptions, because families with loved ones overseas

needed to get all of the information they could, and premium

streaming video, from a variety of news sources, pulled in

viewers to the subscription-based service. Microsoft's MSN,

AOL, and Yahoo! will be launching premium online video

streaming subscription services later this year.

-- The high-speed connection providers are partnering with

"content" sources to create high-value services -- the

companies who provide the high-speed "pipes" are working

closely with content companies to provide branded premium

services that attract new customers and reduce churn among

existing subscribers. Companies such as Italy's FastWeb, MSN,

AOL, Yahoo! Broadband, and others, are providing brand name

services in partnership with DSL and cable modem services.

In-Stat/MDR predicts that four categories of subscription services will succeed:

-- Sports related services will attract subscribers around the

world, and during playoff events. FIFA's World Cup Soccer will

drive growth during 2006

-- Movie and TV related sites, such as CinemaNow, Movielink and

SoapCity(TM) will help the Hollywood studios develop their

online presence

-- General interest sites from major portal providers will

provide the lion's share of the market, in partnership with

sports and movie & TV sites, to drive traffic

-- Video communications services, such as Vibe Phone, Intratel,

Yahoo! Broadband in Japan, FastWeb in Italy, and others, will

create new video-over-IP services that succeed as follow-up

services to voice-over-IP products like today's VonAge,

Net2Phone, and others

The report, "Consumer Oriented Subscription Video Services Over IP Networks" (#IN030590MB), provides in-depth discussion, market analysis and forecasts, for the number of subscribers, by category, by region, by year, for four types of consumer-oriented subscription services delivered over the Internet, estimating the annual revenue per subscriber and providing the annual value, by category, by region, by year, for this important emerging market. The report also provides In-Stat/MDR's estimates for the annual value, by region, of online adult content subscription video services. To purchase this report or for more information, please visit: http://www.instat.com/catalog/Ccatalogue.asp?id=39 or contact Erin McKeighan at [e-mail] or 480-609-4551. The report is priced at $2,495.

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With over 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.