The growth of illegal video downloading is irreversible, but there’s still time to make monetise online video and IPTV if the TV industry acts now. That’s according to, which concludes the only way to combat the loss of revenue from is to offer free, legitimate alternatives (Coda Research Consultancy (read the executive summary here). Or as the report’s author Steve Smith puts it, “the horse has already bolted on illegal video downloading, but its rate of growth will be lessened if Project Canvas and Hulu-type aggregated services go ahead”. The report estimates that, in the UK, web users watch the paid-for equivalent £1.3 billion of illegal video annually.

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The BBC hopes to launch the Canvas open IPTV standard in partnership with other broadcasters by 2010 and US free-to-air VOD platform Hulu is in talks with UK rights holders to bring its wildly popular service across the Atlantic. But they will have to get a move on: Smith reckons that if such services don’t go ahead by the start of next year, “illegal video behaviour” will grow represent about 60 percent of video-watching in the UK by 2015. If they do succeed, however, the illegal percentage will drop to 30 percent by 2015.

If aggregated film and TV catch-up services do get launched in time, Smith predicts viewing of all audio-visual material will rise to an average of 219 million hours day—meaning that online and IPTV VOD will generate £500 million a year, with subscriptions contributing £192 million. At the same time, revenues from old-fashioned linear TV services will decline 10 percent to £2.86 billion.