Broadcasters Fight America's New Love Of Online Viewing

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News Posted: Mon, Oct 25 2010 9:08 PM

With smartphones and iPods, game consoles and PCs, e-readers and tablets, Americans now spend a truly mind-boggling number of hours each week watching TV, even more than the mega-hours they spent as couch potatoes last year. Online viewing means far fewer commercials and broadcasters have begun to fight back and eliminate free TV shows on the Web.

News Corp's Fox set off a firestorm when it blocked online access to popular shows like "Glee" to 2.6 million Cablevision Systems broadband Internet subscribers last weekend. This was part of a fee dispute over how much Cablevision pays Fox for the rights to carry Fox-owned television channels. The blockade only lasted about 12 hours, because viewers of other television services were inadvertently affected. That snafu lead lawmakers to tell Fox to knock it off. Meanwhile, ABC, NBC and CBS also turned off access to full episodes when accessed from the new Google TV, which became available this month.

Are broadcasters being greedy? Or are Americans' new online viewing habits making it more difficult for them to pay for the shows we are consuming? A slew of new research has quantified just how much online, commercial-avoiding hours of television we watch.

Turns out, we have three secrets for achieving high volume vegetative states while reducing exposure to advertising:

1) American's are double dipping during TV time by also using a smartphone or a PC, according to uber-TV habit researcher the Nielsen Company.

2) We watch our TV while standing in line and other moments that used to be squandered on quiet thinking time, or fidgeting impatiently. The mobile video audience grew 51% year-over-year, surpassing 20 million users in Q1 2010 for the first time, Nielsen says.

3) We use on-demand and DVRs to ditch the commercials and we use the time saved on commercials to watch more free TV, finds a new study by SAY Media.

Ergo, in the first quarter of 2010, viewers watched two more hours of TV per month than they did in Q1 2009. Nielsen also says that the average time spent simultaneously using TV and the Internet in the home grew by about 10% to 3 hours and 41 minutes per month. [Link to report. PDF.]

Not surprisingly, The number of people who are viewing television through "time shifting means" like the DVR and on-demand devices has also grown by 20% according to Nielsen's first quarter research, to 94 million.

Two studies released Monday quantify commercial-free viewing even further. Turns out that about 56 million are regular consumers of online/on-demand television, though most also watch live TV. Of the online viewers, 90 per cent own a TV, but they also own a total of 5.4 devices equipped for watching video, including their TV and PCs, says the research published by SAY Media. About half subscribe to Netflix.

The group that watches both live and on-demand video watches a mind boggling total of 30 hours a week, compared to 25 hours a week for those that are not giant consumers of online. When I do the math, I come up with about half of their free time is spent with eyes glued to screen. (168 hours in a week, minus 56 hours spent sleeping, minus 40 hours spent at a job = 72 free hours of which 30 is spent watching video.)

Interestingly, those who don't watch live TV at all watch slightly less. 13 percent get their TV exclusively over the Internet or other on-demand means. These are mostly in the 18-24 demographic and they watch a comparatively mere 21 hours of video a week, half of which comes from the Internet, and half from an on-demand source.

New research from Radius Global Market Research explains why they watch less ... the quality of online video sucks peanut butter and it's not all free. Half of Radius' survey audience said lack of smoothness in the streaming or buffering of content drove them to frustration. Another roughly two-fifths said that the cost of content kept them from downloading more. I take that to mean that if it wasn't (mostly) free, they (mostly) weren't downloading.

All this leads the an obvious conclusion. Broadcasters have little incentive to make their content available on the Web even though consumers have so many more ways to watch it.

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rapid1 replied on Tue, Oct 26 2010 11:09 PM

"These are mostly in the 18-24 demographic and they watch a comparatively mere 21 hours of video a week, half of which comes from the Internet, and half from an on-demand source."

This is TV's future market right here. Unless they figure out a way to do it, do so quickly, and do it right an entire market is going to fade before there very eyes.

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