Why Television Still Conquers Online Video

Monday, 06. 22. 2009  –  Category: T2 Communications

Online video has exploded in the past year, with a record 16 billion videos being viewed by Americans in April 2008.  So is the online video revolution upon us?  Will consumers, particularly young viewers, be dropping their pay TV service in favor of their internet connection?  Not so fast.  There are many reasons live, linear, pay television (cable, IPTV, satellite) is not going away any time soon.  Here are six:

Volume: While online viewing continues to grow, it still pales in comparison to television.  The National Cable & Television Association reports that there are approximately 64 million cable television subscribers in the United States.  By those numbers, that equates to about 250 online videos being viewed per household per month, or 8 videos per day.  Even if those videos are 30 minute sitcoms, you are still talking about 4 hours of television per day.  More than likely, those videos as small as a 30 second clip on YouTube.  At those rates it comes out to as little as four minutes per day, or less than 2% of the daily television viewing.  A study released this month by Bernstein Associates showed that the numbers may be even farther apart.  They found viewers averaging about 5 hours per day on the television and only 2 minutes per day online.

Live Events: With the innumerable media outlets available today, it is hard to hide from the latest news, sports and gossip.  Even if you choose to DVR your favorites show or the big game, it’s nearly impossible to not have it blown for you by the time you get around to watching it.  CBS has experimented with live events online, placing NCAA Basketball Tournament coverage on their website this past March to great success (albeit with some glitches).  They are also working on trying to air their coverage of the 2010 Super Bowl online.  Still they are in the minority when it comes to live video.

Monetization: At a recent conference, key cable programming executives came together to discuss their strategies for online video.  At the heart of their conversation was the fact that while popular, online video is free.  For a cable channel that relies on subscriber fees coming from cable companies, offering their content beyond a promotional sense just doesn’t make strategic sense.  In their revenue model, live, linear television still reigns supreme.  For cable operators, they are already working on ways to build in online video.  However, like cable content providers, they are looking at it from an add-on benefit to subscribing to their service.

Quality: When it comes to the difference between online video and television, it comes down to three factors: resolution, compression and reliability.  Currently, each of these factors favors television viewing.  And as Americans continue to invest in flat screen televisions and stereo equipment, these factors will continue to remain relevant regarding the primary source of video viewing.

No More Computer Time: Many Americans spend their entire work day in front of a computer.  And with studies showing that this increased time at the keyboard is affecting physical abilities, it is not surprising that many don’t want to jump onto a computer to catch up on their TV viewing.  Several companies are attempting to bring the television viewing experience to online video, but none to date has been able to catch more than the passing attention of the marketplace.

“Couch Potato” Syndrome: Why is it that, even with a great collection of TV and movie DVDs at their home, many Americans choose instead to flip through channels looking for a movie to watch?  The simple answer is it is just easier.  With so much content available to us, sometimes it is just too hard to make a decision.  Instead, we just channel flip until something catches our attention.  And for many of us, channel flipping has become as much a part of the viewing experience as that actual content.

Until an online video model can be created that improves in each of these areas, television will continue to be the majority player in the video market.

David Fleming is the Director of Corporate Communications for T² Communications, a CornerWorld company.

Tags: Bernstein Associates, cable, David Fleming, DVR, Hulu, IPTV, March Madness, NCTA, online video, satellite, Super Bowl, television, YouTube