A report by investment bank and brokerage Bear Stearns suggests that internet video is on the cusp of an explosion. In the United States over 70% of internet users now stream video, watching an average of 7 minutes a day. Video advertising spend is projected to reach $4.3 billion by 2012, when nearly 90% of internet users in the United States will be watching video online.

According to comScore, the number of online video viewers in the United States rose by 15% over the last year to over 140 million. YouTube was the top site, attracting over half of them.

The number of streams viewed has grown even faster, by 40% over the last year, to over ten billion streams. Nearly a third of them were from YouTube, way ahead of any other site, growing by over 200%.

Video advertising spend has been growing accordingly and is projected to reach $4.3 billion in the United States by the end of 2011.

The Bear Stearns analysts conclude that internet video already has vast reach and is growing. Video advertising is acceptable to the majority of viewers and provides engagement that offers compelling value to advertisers. The viewer base is maturing and there is still much room for growth in monetisation.

The Bear Stearns annual media conference takes place this week in Palm Beach, Florida. Keynote speakers include senior executives from some of the leading media companies, including CBS, DIRECTV, Disney, News Corporation, Time Warner and Viacom.