"TV Everywhere" efforts won't be TV for everyone -- as 7.7 million viewers could be out of the loop. That is, those who won't pay a fee to watch TV programs online -- shows they are currently seeing for free.
The 7.7 million is the number that Los Angeles-based media researcher Interpret says could be left in the lurch if the cable industry gets its way. It means some 11% of all U.S. active streamers of video, which number around 71 million.
With "TV Everywhere" initiatives, it is cable operators' intention to ensure that those who watch free TV on the Internet are also cable customers. The companies don't want Internet-only viewing coming at cable's expense.
For those who are not cable subscribers, the goal would be to get nearly 8 million streaming video users to pay some sort of fee to access premium TV shows online.
The largest group affected will be lower average-income viewers -- especially younger adults 18-34. Many of these viewers stream video on the Internet rather than pay the much higher expense of a monthly cable or satellite service.
Interpret says that 12% of males 18-24, 14% of males 25-34, 11% of females 18-24, and 15% of females 25-34 only stream TV shows online. The average income of all age groups that only stream video online is $42,314 versus the average income of $60,054 who both stream and subscribe to cable or satellite.
The good news for the cable industry is that 89% of those who stream video online have either cable or satellite service, which comes to 63.3 million viewers. That amounts to 33% of all cable/satellite customers.
The study says 67% of cable and satellite subscribers, or 126.6 million viewers, only view shows via traditional TV services.
One major potential stumbling block for "TV Everywhere" efforts, says the study, will be the higher commercial loads expected for premium TV shows. Right now, premium TV sites such as Hulu.com offer just one 20-second ad break. Others, like ABC.com, run three or four 30-second commercials per hour-long drama or half-hour comedy.
But it's still far less than the 18 minutes per hour of non-program time that traditional TV runs.
However, it is the intention of "TV Everywhere" to increase current commercials online -- to run online TV programs with the same 18 minutes per hour of commercial and TV promos as traditional TV. Interpret believes this could force some viewers back to traditional TV usage, where their DVRs will allow them to fast-forward through commercials.
The study believes that "TV Everywhere" should add value for users, supplying shows they can't get elsewhere. It says, for example, that 45% of online streamers regularly watch programs that are no longer available on traditional TV.
In addition, to supplement traditional DVR usage, the study says that "TV Everywhere" should offer current seasons of full-length programs as soon as possible. Nearly three-fourths of those who regularly stream video do so to catch up on recent episodes they missed on TV.
COMMENTARY: I am a proponent of the paid content business model and strong believer, that at least for online social communities, it is very difficult to generate a profit solely from ad-supported user-generated content. Facebook, YouTube, MySpace and others are great examples. Twitter is moving towards ad-supported content.
Media overload is starting to hit the online sector just like television. There are just too many online display ads. Clickthroughs are pathetic. It is too easy to ignore online display ads. The entire online experience has been negatively impacted by too many display ads and slow downloading speeds.
In order to make it with paid content you must have high-quality original content, content you cannot get anywhere else, a large viewing market for that content, a large enough market niche to make the venture financially viable, flexible revenue models (one-time views, multiple views, unlimited views pricing packages) and offer high perceived value.
NetFlix has demonstrated that subscribers are willing to pay for online movies. Hulu is making a move towards the paid content model. The porn industry has benefited tremendously from the internet. Live events are turning to the Internet to reach their target market. The evidence is there if you can meet all or most of the above requirements.
I am not so sure that 8 millin viewers will drop out as a result of having to pay for online content.
Courtesy of an article dated October 29, 2009 appearing in MediaPost Publications' Media Daily News
Comments