Global online video revenue is on track to surpass $4.5 billion by 2012, up from $1.2 billion in 2008 according to research firm In-Stat.

Purchased/rented videos will offer the most growth for online video short term, primarily due to an increase in subscription services such as Netflix, which charges a flat monthly fee to deliver DVDs and online content that can be viewed on TV sets. Ad supported professional video from major TV networks will become a solid revenue contributor by 2012.

“What is now seen as a predominantly younger pastime will spread to encompass a wider group of people, in part due to the aging of current online video viewers, but also as a result of word of mouth, spread of services, growth of in-home networks, and new network-connected consumer electronic devices,” says Gerry Kaufhold, In-Stat analyst.

“The survey data in a recent In-Stat report indicates that over half of consumers actually still prefer packaged goods, which bodes well for Blu-ray discs. Surprisingly, younger people who regularly watch online were the group that expressed the highest interest in owning a package goods bundle that includes artwork and extra content.”

By 2012, 39 percent of adults in the U.S. will have purchased or rented online video. Fifty-four percent of U.S. consumers still prefer physical discs when buying movies or TV shows.

By 2012, In-Stat predicts that 90 percent of U.S. households will have access to broadband, with 94 percent of these individuals viewing online video

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