A new study carried out by Adams Media Research predicts that fees generated by downloads of TV and movies will exceed that from adverts on free programming.
The US study predicts that advertisers will spend $1.7bn (£871m) on internet video streams to PCs and TVs, while movie and TV downloads will generate consumer spending of $4.1 bn (£2.1bn) by 2011.
Of the two models currently used in the video streaming/download market, content providers using ad-supported distribution models are faring better at the moment, with $409m (£209m) generated in 2006.
Consumers spent $111m (£57m) on video and movie downloads in 2006, which are free of commercials, and it is this model which is predicted to win the battle in the long term.
With the growth of fast broadband connections, and TV companies getting in on the download market, including Channel 4 and ITV, the download market is predicted to achieve faster growth.
The ability to view movies and TV downloaded online through a TV set will be the key, according to the report. Many big media players are preparing to launch these services, including Microsoft, through the Xbox.