Online sales of TV shows, movies and other prerecorded video is expected to hit $1.5 billion by 2007, according to a report from Strategy Analytics.

The report, "The Video Store Goes Virtual: The Global Outlook for Online Video Sales," predicts that video sales through Apple iTunes store will total $298 million by the end of 2006.

Global revenue sales for online video is expected to hit $5.9 billion by 2010.

"2007 will be remembered as the year in which online sales of prerecorded video finally become a real business," comments the report's author, Martin Olausson, senior analyst from the Strategy Analytics Broadband Media & Communications service. "Just like with music, online delivery of video content is now emerging as a viable and increasingly important distribution channel for content owners."

Last month the American Advertising Federation announced that TV budgets are shifting to online video.

2006 seemed to be the year of video with Google Inc.'s acquisition of video-sharing site YouTube.com for $1.6 billion.