The industry in the UK is set to be worth $364 million in 2009, almost nine times more than it was in 2006 as TV companies look to adjust their operations to cater to the changing needs of audiences. During 2009, the US is predicted to spend over $2 billion with Japan, Germany and France all expected to spend $155 million, $77 million and £68 million respectively.

It is no surprise to find that the rise in on-demand and Web TV revenue has coincided with an increase in the number of TV shows downloaded in the UK. The 2007 Internet and Convergence Report, a separate study by Continental Research, showed that in 2007, 2.4 million TV shows were downloaded from the Internet - almost double the previous year.

The success of on-demand TV can be attributed to the rise in the number of on-demand services from the BBC, ITV and Channel 4 and the increase in broadband uptake. Earlier this year, the BBC revealed that more than 3.5 million programmes were downloaded in the two weeks that followed the launch of its iPlayer service on Christmas Day, 2007.

According to Karin von Abrams, senior analyst at Internet research company, eMarketer on-demand TV has made it more difficult for marketers to target relevant audiences.

"In the short term, on-demand TV will almost certainly have a negative effect on the advertising industry as technologies such as personal video recorders make it possible to skip advertising messages," said von Abrahms.

"On-demand TV also undermines the traditional television schedules where Saturday morning was designated for children and after 9pm was for adults. It is now much more difficult to target key audiences."

However, on-demand TV should not be seen as a threat. In order to appeal to audiences in this fragmented environment, marketers should make the most of the technology at their disposal.

"With on-demand [TV], consumers are actively searching for content and so while the process is still passive, viewers are slightly more open to advertising as long as the brand has an affinity to the programming."

"In the online environment, brands have to avoid being intrusive. Key to the development of online advertising will be how brands and programme makers take full advantage of the technology at their disposal. What has been done so far has been fairly elementary - merely reproducing the content online fails to make full use of this medium and marketers are still not sure how to monetise this just yet."