23 Comments

Summary:

For years online video has been seen as complementary to broadcast TV, but now there are signs that video on the web could be displacing traditional TV viewing during the prime-time hours. So is web video finally starting to replace broadcast TV viewing?

tvset-thumbnail

For years, broadcast and cable TV programmers and distributors have talked about web video as if it didn’t pose a threat to their business, typically arguing that it was complementary, not competitive. And statistics seemed to indicate that was in fact the case — the amount of time people spent watching television continued to increase while web video remained largely a daytime work distraction.

But now there are signs that web video could be displacing traditional TV viewing during prime time. A piece in the Wall Street Journal highlights the shift in consumer behavior, noting that web video distributors are finding that their shows are increasingly being watched at the same time that TV programmers broadcast their hottest shows.

According to the WSJ, in just a year the peak viewing hours for shows distributed by Blip.tv have shifted to the prime-time hours of 8-11 p.m from 12-3 p.m. Meanwhile Nielsen found that the number of viewers who watched online video during prime time hours in March increased 14 percent to 62.4 million over the course of a year. Meanwhile, online viewership during the day grew only 1 percent, to 45.4 million.

And it appears that the growth in online video viewing during prime time is not just due to people “snacking” on web videos from YouTube during commercial breaks. Revision3 CEO Jim Louderback told the WSJ that 40 percent of its video plays happen through devices that are connected to the TV set, which means that users are watching web videos instead of tuning into broadcast and cable programming.

With more consumer electronics devices with Internet connections and web video services built in due to hit the market, it’s easier than ever for consumers to access web video content in their living rooms. And services like Google TV — which aims to combine live, linear TV programming with video and other content from the web — could spell trouble for traditional programmers.

Is there any hope for TV programmers to hold onto their ratings as more and more web content finds its way to the TV? Most have launched online video initiatives of their own — but most have also shied away from making IP-delivered video content available through connected devices. In fact, some, like Hulu, have been antagonistic to companies like Boxee and Kylo that try to make it easier for consumers to view its videos on the TV.

However, even if Hulu and other aggregators of broadcast TV content on the web are able to find their way onto the TV, it still won’t help fight what is becoming an increasingly fragmented market. With infinite choice of broadcast, cable and web content on the TV, we can expect the ratings for traditional programmers to continue to drop — which could lead IP video to eclipse broadcast TV viewing in 10 years, as one research firm suggests.

Photo courtesy of (CC-BY-SA) Flickr user tnarik.

Related content on GigaOM Pro: Google TV: Overview and Strategic Analysis (subscription required)

  1. When do you think ISPs are going to want their pound of flesh for choking their pipes with video data?

    Share
  2. I think the shift to more IP-delivered video is a given. The more interesting conversation is how we drive revenue per minute of video watched to something equal with TV. When we get there, we’ll stop talking about TV versus web video and just talk about the video business.

    Marty
    thePlatform

    Share
  3. Ridiculous. Time and time again the reality is that more people are watching television more than ever. They’re supplementing TV time with more media time consumed through other methods. People are shocked at how much time children are with consuming media through different types of devices, but it’s all increasing.

    Web video advertising still has no viable business model or revenue stream. Just because you have small bits of incremental revenue does’t mean you have a media platform or a sustainable business. You just have a web site with big time buzz.

    Anyone that thinks that TV will go the way of the wind in the next twenty years is nuts. The same companies will hold the rights to the content that sells, it’s just going to be up to them how it is distributed.

    Technologists obsessed with free content distribution will never be able to unseat the behemoth of intellectual property that drives the $70B per year television ad business.

    Share
  4. An interesting article I read recently said,

    “Cable and satellite networks are evolutionary dead-ends that cannot hope to match the innovative pace enabled by the Internet.

    An estimated 10 million Americans watch Internet video on TV monitors via computers. Ultimately it is an intermediate step leading to either (1) browser-centric TVs or (2) TVs, or devices similar to the Apple TV, with their own Apps Store or Yahoo-like widgets. The store would be like the iPhone one, except that its (typically free) applications would enable Web sites like Hulu.com and YouTube to be watched on TV.”

    Source: Video Insider

    Share
  5. The threat of consumers dropping cable or satellite TV service in favor of a broadband-only subscription—known as cord-cutting– has yet to materialize in a substantial way. Sanford C. Bernstein & Co. recently noted that overall pay-TV subscriptions for cable operators, satellite companies and telecom providers grew by 667,000 in the first quarter of 2010, calling cord-cutting “perhaps the most over-hyped and over-anticipated phenomenon in tech history.” WSJ May 25,2010

    Share
  6. The WSJ is talking about “niche” content, and Revision3 and blip.tv primarily focus on niche content. Nothing wrong with that, but niche content is not the same as mainstream content. So suggesting that “niche” web based video is going to somehow replace the number of hours of prime-time video being watched on TV is simply not a fair comparison.

    Share
  7. I have not had a TV for more than a year and I don’t notice it. However, when it comes to live sporting events like the Tour de France and the World Cup 2010, it’s necessary to have a TV (or go to a place with a TV). The Dutch network, NOS, which has the broadcasting rights to the World Cup 2010 says that although people can watch it live on the web (as well as TV of course), NOS has to limit the number of people logging on to watch the matches. That limit is 120,000 people. They also say that having more than that number of people will just kill the broadband network, which in the Netherlands is already very fast.

    Share
  8. [...] recent article in NewTeeVee notes that the number of people  viewing web  videos during prime time hours is increasing.  The [...]

    Share
  9. [...] Is Web Video Replacing Prime-time TV?. [...]

    Share
  10. Christopher David Thursday, June 10, 2010

    This is an inevitable shift. Of course it will vary in the different age groups but for sure the way content will be viewed and consumed. I want to decide when my prime time is and not one mandated by some institution neither in a broadcasted manner. It has to be up to the individual to decide when, where and how to consume what.

    Share

Comments have been disabled for this post