Global revenues from adult video chat services are expected to rise sharply over the next five years, reaching $1.5bn by 2012, according to a new report from Juniper Research.

The report states that, while adoption levels of such services are comparatively low even by the standard of mobile adult services, the average monthly spend of this niche market is typically 10-20x higher than for other adult services.

According to report author Dr Windsor Holden, Those video chat services already deployed are showing quite remarkable levels both in terms of customer retention and average usage, with users regularly returning to chat to the same hostess and developing a virtual relationship with her. With 3G penetration expected to exceed 25% in many developed markets by the end of 2008, there is a significant opportunity for service providers to launch and monetise live chat services.

The report also recommended that, while users of mobile adult services are less price sensitive than those of other mobile content, offering subscription services at a reduced price for a trial period would ultimately increase revenues, as such a period allows the customer to ascertain whether or not the content is worth a greater, longer-term investment.

Other findings from the Juniper report include:

• Video chat will comprise 33% of mobile adult service revenues by 2012, compared with just 8% in 2007
• Western Europe will remain the largest regional market for mobile adult services throughout the period covered by the report, with revenues rising from $78m in 2007 to $453m by 2012
• Given the continuing concern amongst service providers regarding the ability and inclination of operators to provide adequate marketing and distribution channels for their content, service providers should continue to explore D2C alternatives