The internet is set to revolutionise film distribution, with consumers predicted to spend $4 billion on downloadable film and TV shows by 2011, claims Adams Media Research (AMR).

With consumers spending $111 million on download to own films and TV last year, launch of devices such as the Apple TV seems set to explode the market.

Sales of video downloads will reach $472 million in 2007 but climb exponentially to $4.1 billion by 2011, AMR said.

New distribution models will drive profits for movie studios, the researchers also said. Worldwide US major studio feature film revenue will climb at a compound annual growth rate of 4.3 per cent, from $35 billion to nearly $42 billion between 2006 and 2010, they said.

"The current hand-wringing about the future of the film business will prove as short- sighted as was writing off the prospects for future industry growth when cassette sales went flat in the mid-1990s," said AMR president Tom Adams, "When consumers get new ways to consume movies, they consume more movies and in 2006 two very cool new delivery technologies were deployed: high-definition discs and internet downloads."

Fueled by the growth in broadband penetration, video is quickly becoming one of the most popular types of content on the internet, the researchers note.

Advertisers are expected to join the fray, and will spend $1.7 billion on internet video streams to PCs and TVs by 2010.

“The internet is going to revolutionise the business of video distribution,” said AMR president Tom Adams. “But in all the excitement about product launches by Wal-Mart, Amazon and Apple, people are getting giddy about how fast it will happen."