The Issues with Internet TV


Entertainment Usage Keep Changing

The world of content and entertainment is changing right before our eyes.  People want their entertianment on their big screen, on their PC, on their mobile whatever.  The “pro” content providers (the dudes/dudettes) who earn the big $$$$ are really trying to figure out what YOU are doing wrong!   Their weekly schedule is good.  It’s logica.  It’s what consumers want.  Should be they change it enough.

But then there’s that pesky Internet stuff and suddenly people can get their content when they want…day/night, home/office/round-the-globe. That sorta, kinda sucks.  How do you charge big $$$ for advertising when people don’t all watch at the same time?  Why are folks screaming out their windows?   What are they saying?

“I want you to get up right now, sit up, go to your windows, open them and stick your head out and yell – ‘I’m as mad as hell and I’m not going to take this anymore!’ Things have got to change. But first, you’ve gotta get mad!… You’ve got to say, ‘I’m as mad as hell, and I’m not going to take this anymore!’ – Howard Beale (Peter Finch) — Network (1976)

While Howard Beale was a “little” over the edge he did agree with futurist Faith Popcorn on one point…folks seem to want to cocoon in their living rooms and be entertained.

At least that’s what Nielsen Research recently noted:

  • Total average time a home TV was on last year was 8:14 (hr, min)
  • Individual viewers watching TV dropped one minute to 4:34
  • Almost every US household has 1 TV set (99%), 47% have three or more
  • More than 20% of US homes have DVRs (Digital Video Recorders)

Sounds great for the networks, stations and pipe-to-the-home providers. That’s because in the good old days, television ruled.

It was like Howard said, “This tube is the gospel, the ultimate revelation; this tube can make or break presidents, popes, prime ministers; this tube is the most awesome goddamn propaganda force in the whole godless world.”

Now they have competition – serious competition.  More screens, more content options.  The option that gets VC’s hearts a pumpin right now is mobile video.  Big question is whether it is simply an oddity or people will be satisfied with a diet of content that is about the equivalent of watching a miniature VHS image.  Only 5% of Europeans said they wanted TV on their mobile screens.

According to The Conference Board, 16% of US households watch TV broadcasts online.  comScore says these viewers will grow as more and more content is delivered over the iNet.

Figure 1 – Online Viewing – The combination of kids who grew up on the iNet and the rapidly increasing outlets wanting to grab more of the viewing public find online TV as a virgin territory and opportunity.  Source – comScore

Our kids tried it for awhile but quickly moved up to watching their content on their notebook computers (HD quality screens).  By 2011 there will be more than 200 M broadband users and 91% will watch content online.


Figure 2 – Steady Growth – As broadband to the home increases, so will the audience for Internet TV.  The great thing for content owners and advertisers is that the content can appeal to very specific market sectors …on a global basis.  Distribution costs remain negligible to low and demand keeps climbing.  Source — eMarketer

Our son is proud of the fact that he doesn’t have a TV set.  Not him boy! Nope just a notebook computer & 24-in LCD monitor. Oh yeah…and a gazillion iNet viewing options!

In their insatiable thirst for eyeballs, networks and TV stations have paid attention to the shift and are throwing more content to the web.

Figure 3 – My Eyes, My Eyes – While Tellywood screams and hollers about their content protection,  they continue to throw every segment, every title, every piece of story possible onto the Web to entice a larger audience.  They’ll figure out how to make money at Web 2.0…later.  Source – NY Times

These people live or die by the numbers and if the numbers are moving to Web 2.0 they have to be there to produce dollars for viewership (ad dollars) whether they like it or not. OR as Diana Christensen said, “The network can’t deal with them directly; they are, after all, wanted criminals.”

And the Internet solves that problem nicely!  For younger folks like our kids who grew up on the iNet…it’s natural.

While YouTube, YahooVideo and the other content sites get all of the ink, most of the stuff they watch is much the same as they could watch on our big screen if they ever came into the living or family room.

Figure 4 – More Than Jokes – For all of the coverage we see on dumb/dumber YouTube, Facebook videos you’d think that all of the Web 2.0 content is mindless stuff.  But close analysis of online viewing habits shows that people watch more news/sports as well as personally produced videos.  Something researchers find interesting is that folks are more interactive with ads on the Web.  Source — Ipsos

Even though our kids would never admit it, they are actually more involved with and responsive to content online, even when it is the same fare they could have watched on the TV set.

In fact, according to Simmons Research:

  • 43% of the online population watch one or more of their favorite TV shows on the iNet
  • 13% only watch their TV shows online
  • 25% were more engaged in the content
  • 18% are more engaged with the ads
  • Women, younger consumers have higher levels of online engagement
  • 18-54-year-olds rated the iNet as trustworthy as any information source
  • Most indicated they are more responsive to online ads