Internet TV -- there will be blood

Internet TV -- there will be blood

Technology key to the widespread adoption of Internet TV.

The surge of Internet TV entrepreneurs promise movies and TV programs on any screen, anywhere, anytime, yet little attention is focused on the monumental challenge and new technologies needed to make video ubiquitous.

Hyperbole about broadcast television soon following dinosaurs to extinction bubbles at Internet TV gatherings from Sundance to NATPE. Yet traditional TV's audience -- 260 million viewers in the U.S. alone -- is growing.

Rather than rob traditional TV of its audience, Internet TV -- including popular user-generated-video sites -- builds audiences for traditional TV network programs, according to the report State of the Media 2007.

"There is money being made by networks whenever they can get more than 100,000 people to watch on the Internet," said Gerry Kaufhold, who analyzes Internet and mobile TV for In-Stat.

Internet TV is couch potato nirvana. People who miss favorite TV programs now often watch them on their computer at work during lunch hours and spread the word to friends, which adds incremental new viewers for network and cable shows. One episode of The Office, for example, attracted 400,000 Internet viewers after its first TV broadcast. Another attraction is the chance to watch programs from lots of countries and hard-to-find movies genres like documentaries.

Digital natives aren't the only eyeballs for network TV online. Internet TV's popularity is growing because a wide spectrum of the population watches everything on computers from last night's episode of House to new indie films on Web sites like Caachi.

Nearly 80 million Internet users in the U.S., or 43% of the online population, have watched a TV show on the Internet, up from 25% a year earlier, according to Toronto research firm Solutions Research Group. A new SRG survey found that about 20% of Internet users in the U.S. watch TV episodes on the Web every week, compared with 14% who use a cable operator's video-on-demand.

Even digital video recorders that let people time shift their viewing are helping bump up the amount of time people ages 18 to 49 watch TV -- especially during prime time, reports The Nielsen Company.

"Through the 2006-07 TV season, the average minutes per day per viewer has continued to increase," said Larry Gerbrandt, a consultant with Media Evaluation Partners of Los Angeles and former Nielsen analyst. "It's grown steadily during the last 20 years despite the Internet and all other distractions. Why? Because there are more channels, more offerings, more television sets in homes, and lots of other places with TVs on like bars, airports, and even airplanes."

Besides, traditional TV's audience grows simply because the number of U.S. households with televisions gets larger each year.

Meanwhile four market forces push Internet TV's ascent, according to a September 2007 white paper by analysts Greg Ireland and Lewis Ward of IDC.

Nearly 300 million households worldwide (60 million in the U.S.) now have broadband so they can play videos on computers.

Consumers are finding videos on the Web every click of the mouse.

Professionally produced content from TV networks and movie studios and a near infinite inventory of niche, user-generated videos creates a mind-boggling library of long tail content. (500,000 user-generated video uploads a day worldwide in 2007, and expected to grow to 4.8 million by 2011.)

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