According to estimates made by Understanding & Solutions, the global online video market will have a retail value of over US $3.8 billion by 2011.

The United States had the most developed online video market so far, although online video revenue for the country is only expected to reach US $280 million this year, representing one percent of the total home video market, the research company reported.

"By 2011 online video in the U.S. will represent eight percent of total home entertainment revenues, with Western Europe close behind at seven percent," said Mai Hoang, analyst at Understanding & Solutions.

"What's more, multiple formats will coexist in the future, and no one format will control the home entertainment landscape, quite unlike the domination of DVD since the demise of VHS," Hoang added.

"The new generation of high definition video formats will also help to shore up packaged media's presence within home entertainment revenue streams," eMarketer reported.