$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.

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Will Digital Revenue Ever Replace What It’s Displacing?

We’re fairly certain television is being reinvented, but that doesn’t mean digital revenues can ever replace the analog ones they’re running out of town. Yes, maybe NBC CEO Jeff Zucker, in his grandstanding against Steve Jobs and the rest of the future, is right. As he often puts it, “We can’t trade analog dollars for digital pennies.”

In a report released Monday that knocked a few percentage points off big media companies’ stock prices, Lehman Brothers’s Anthony DiClemente said he doubted the reigning content kings would be able to maintain their revenue due to new forms of distribution.

We dug deeper into the report to figure out exactly how much money Lehman thinks is being lost, gained, and left by the wayside. First of all, DiClemente is skeptical that online advertising could replace television advertising, to the point that advertising doesn’t figure heavily into his report.

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