$2.4B in U.S. Video Ads by 2010: Lehman

The investment bank Lehman Brothers, which basically discounted the potential of online video advertising in a recent report on digital entertainment, now puts a number on that market: $1.1 billion in U.S. video ads this year, rising to $2.4 billion by 2010.

Lehman had previously forecast that video-on-demand and iTunes revenues for studios would climb to $2.5 billion in 2015 from $319 million in 2007, so paid content and ad revenues are at least in the same ballpark. Of course, they’re nothing like traditional television numbers.

TechCrunch this morning pointed to a Lehman Internet industry report from July, which we have a copy of as well. It shows online video advertising revenue outpacing Internet advertising growth for the next three years, but accounting for no more than a single-digit percentage of the broader category during that time period. Lehman also sees overall growth slowing during those three years, though that’s a natural trajectory for a nascent industry like online video — no one expects, for example, another year of 866.7 percent growth in online video ads (which the sector posted back in 2003). The report isn’t available online, but here’s the relevant chart:

The Lehman forecast for online video is pretty middle of the road, even a bit pessimistic compared to those of other firms (though most predictions tend to extend a couple years further out). Parks Associates sees $6.6 billion in 2012 in U.S. online video ads by 2012; Forrester is looking for $7.1 billion by 2012; and eMarketer says $4.3 billion by 2011. And In-Stat said today that it expects $4.5 billion in worldwide revenue from all online video business models by 2012.

In other revenue projection news (which there seems to be a ton of today; see Chris’ report on premium video revenue), eMarketer points to an iSuppli report that projects $3.8 billion in worldwide mobile advertising revenue by 2011, up from $427 million in 2008.