Worldwide online video revenue is expected to top US$4.5 billion by 2012, up from $1.2 billion in 2008, predicts research firm In-Stat.

Much of that revenue is expected to come from online video rentals, with ad-supported online video making up a major part, too.

Research Highlights:

• By 2012, 39% of adults in the US are expected to have purchased or rented online video.
• 54% of respondents to an In-Stat survey of US consumers still favor physical discs when purchasing movies or TV shows.
• By 2012, In-Stat forecasts that 90% of US households will have access to broadband, with 94% of these individuals watching online video.
• Purchased/rented videos are expected to offer the most robust growth for online video in the near term, in large part due to an increase in subscription services such as Netflix, which charges a flat monthly fee to deliver an optimal combination of packaged goods and online content that can be viewed on home TV sets.
• Ad-supported professional video from major TV networks will become a strong 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.