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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.
Online video advertising is seeing rapid growth at the moment, with spending increasing by 83% from last year, according to eMarketer.
US online video ad spending will reach $410 million this year, compared with around $74 million in 2005, says the US-based firm. Spending is predicted to rise to almost $3 billion by 2010.
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