Online film and television show services such as iTunes are a 'dead-end', according to Forrester Research.
Fee-based video and television distribution services will see their business peak this year, the report claims, but will eventually be eclipsed by free-to-use ad-supported media services.
The analysts expect sales to reach $279 million this year – up from $98 million last year – but growth will slow soon, the analysts said as reported by Reuters.
"In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They're already coming," said Forrester Research analyst James McQuivey, who called the paid download video market a "dead end."
The analyst described confusion over different video file formats, difficulties watching downloaded videos on television screens and other technical problems as part of the reason why such services may fail to secure mass market support.
The analyst noted that many broadcasters are moving to make their content available for free online, "free is going to win," he said.
He advised content creation firms to prioritise working with online services that allow users to share content across a home network, such as by using the Apple TV.