A new IDC study shows both service providers and content distributors may be missing revenue opportunities by not offering consumers the option of paying more for faster Internet video downloads.

The study showed 37% of all respondents were willing to pay an incremental 5% fee to download a video fast enough for near-simultaneous viewing, according to Matt Davis, IDC analyst. Among the 18- to 34-year-old respondents, that number jumped to 41%. By contrast, Davis said, previous IDC studies have found much lower numbers, in the 12% to 13% range or even lower, were willing to pay extra for services such as home monitoring or getting Caller ID on the TV screen.

“We were surprised at the results,” Davis said. “We’ve run other surveys around a host of multi-layer applications, and we found that new applications like home monitoring and video conferencing scored relatively high with interest, but the willingness to pay was right around 12% to 13%.”

The study found 35% of respondents had a high level of interest in being able to watch “family-room-quality” video over the Internet, while 41% expressed some interest. In the 18 to 34 age group, those numbers jumped to 54% with high interest and 41% with some level of interest.

“We were encouraged by the consumer demand for this kind of service,” Davis said. “You do get into a younger demographic at some point. That core of power users is always there, but it was broader than that. It was a much broader demographic than we thought it would be, which is, in some ways, interesting in itself.”

Service providers have the technology today to offer this kind of service – it’s the same technology they have deployed to do traffic management, Davis said. Generally speaking, session control and deep packet inspection technology can be used to deliver a better customer experience, Davis said.

“Technologies that initiate session control and bandwidth optimization could be used to do this kind of thing as well,” Davis said. “It’s just that the industry is focused on the blocking [of peer-to-peer traffic] and the monitoring rather than a potential positive for consumers. We are just at the beginning of harnessing that power for the potential consumers. There have to be some rewards there for the facilities-based provider who pushes ahead and takes the capex hit” of building out better networks.

Rather than develop gold, silver and bronze packages, service providers would “associate the bandwidth allocation with the bandwidth usage. That is something new. I don’t think the service provider strategy has yet caught up with the technological capabilities they have in their networks,” Davis said.

One business model for this would be a revenue share between the content owners and service providers, Davis said, but today’s Net Neutrality debate looms large in any such considerations.

“Content providers are so dug in against doing anything with better bandwidth,” Davis said. “The thinking always has been that if you offered a service like this to consumers, there would be no interest in it. But we’re kind of surprised to see consumers are willing to pay. If there is a greater understanding of consumer appetite for this and consumers start to value these kinds of services, Google or Amazon or Apple might come to the table with service providers to broker a deal.”