Thursday, September 4, 2008

Duh! Online TV Viewing is Growing

Confirming what you already knew, the Conference Board reports that online TV viewing has been gaining in popularity. Nearly 20 percent of American Internet households watch television broadcasts online, double the viewership from 2006. And as if to underscore the observation that both professional and user-generated content are getting traction, the study shows the top two destinations for online broadcasts are programming network home pages and YouTube.com.

Aside from other important considerations Comcast and some other service providers--wired and wireless--may have in enforcing usage caps, such limits also help limit the potential damage from a massive switch to downloading and streaming content direct from the source rather than buying subscription video packages. At the same time, usage caps also create a packaging opportunity: "download from my site and the bits don't count against your cap."

Another trend you probably didn't need further evidence confirmation about: most consumers do not like being forced to observe a set schedule when watching video. "Being able to watch broadcasts on their own time and at their convenience are the top reasons users tune in online," the Conference Board says.

Of course, avoiding commercials and content portability also are important. Nearly 72 percent of online households log on for entertainment purposes on a daily basis, and one in ten users indicates entertainment as the most important Internet activity.

“Most consumers are pressed for time and require flexibility in their daily schedules and TV viewing habits,” says Lynn Franco, The Conference Board Consumer Research Center director. “Being able to watch broadcasts on their own time and at their convenience are clearly reasons why we are seeing a greater number turning to the Internet. And, it is the reason why we would expect to see this trend continue.”

The top five types of shows viewed online are news, drama, sitcom/comedy, reality shows and sports, with user generated content following close behind. Among consumers connecting to online broadcasts, 43 percent tune into the news, 39 percent watch drama shows, 34 percent view sitcom/comedy shows, 23 percent watch reality shows, 16 percent view sports, and 15 percent view user generated content. Other categories attracting viewers include previews, additional content from favorite shows, soap operas, and advertisements.

Among online TV viewers, almost nine out of ten watch online broadcasts at home. About 15 percent say they watch internet broadcasts in the office, and 6 percent watch TV online from other locations, including the library or a friend’s home.

“The shift from appointment TV to content on demand is well underway,” says Michael Saxon, Senior Vice President, Brand and Communications, TNS. “Fundamentally, consumers expect content to be available when they want it, and on the screen of their choice – TV, PC, or mobile. For consumers, PCs enhance content on demand from simply time-shifting to place-shifting. Online content can be viewed in any room in the house, or at work or school.”

The top methods for viewing broadcasts online are streaming video, used by 68 percent of online TV viewers, and free download, used by 38 percent of viewers. The top two destinations for online broadcasts are programming network home pages, accessed by 65 percent of viewers, and YouTube.com, accessed by 41 percent of viewers. Other sites used for access include iTunes, Hulu, file sharing sites, social networking sites, and Limewire. Few consumers are willing--at least so far--to enroll in pay-per-download and subscription services.

The catch there is that advertising is the way users can view "no additional fee" content. Despite the user preference for ad skipping, at some point, ad-supported "no additional fee" programming will not be widely available without ad support. And advertisers won't pay at all, or not as much, if they think the ads can be skipped over.

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