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Spending on video downloads to surge: study

Apple Chief Executive Steve Jobs gives a preview demonstration of a device to allow consumers to stream movies, music, photos, podcasts and television shows to their home entertainment systems at an Apple media event at the Yerba Buena Center of the Arts theater in San Francisco, California, September 12, 2006. Annual consumer spending on Internet downloads of movies and TV shows will top $4 billion in 2011, up from just $111 million last year, according to a study released on Wednesday by Adams Media Research. REUTERS/Dino Vournas

BOSTON (Reuters) - Annual consumer spending on Internet downloads of movies and TV shows will top $4 billion in 2011, up from just $111 million last year, according to a study released on Wednesday by Adams Media Research.

“The Internet is going to revolutionize the distribution of video,” says Adams Media Research President Tom Adams.

The growth will be fueled by the introduction of hardware devices such as Apple TV, a $299 box that converts videos downloaded from the Internet into signals that can be played on high-definition television sets.

Apple Inc. is selling those boxes on its Web site and says they will be shipped later this month.

Adams Media Research is betting that video downloads will ramp up gradually as Apple TV and similar devices win acceptance among consumers.

The market researcher forecasts that sales of video downloads will total $472 million in 2007, $1.2 billion in 2008, $2 billion in 2009, $3.1 billion in 2010, then hit $4.1 billion in 2011.

It also predicts that advertiser spending on Internet video streams to PCs and TVs will approach $1.7 billion by 2011.

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