Jan 29, 2009

Internet TV's - high growth track

It seems that every few days new research comes out to suggest that online television is bringing to an end TV viewing as we know it, and the latest came last week from Solutions Research Group.

Among its findings: 50 percent of people now watch at least some TV online, more than double the figure from two years ago.

But what's getting a lot of press coverage is the consulting outfit's finding that online TV viewing is having a greater impact on traditional TV viewing than DVRs like TiVo.

It reports that 70 percent of adults 18-34 have watched TV on the internet, whether on a site like ABC.com or an illegal peer-to-peer site, as compared to only 36 percent who said they’ve watched programs recorded on DVRs. SRG conducted its survey online with 1,200 people 12 years or older.

“There are 71 million broadband households, but only 28 million DVR households,” says Kaan Yigit, study director at SRG.

“If we stop right there and project four or five years out, from an evolutionary standpoint, the online TV piece has a lot more potential impact than the DVR piece.”

But top media researchers are calling that simply hogwash.

“It’s a ridiculous, ridiculous finding that bears no resemblance to reality,” says Bruce Leichtman, president and principal analyst at Leichtman Research Group in Durham, N.H.

“It’s dead wrong. It’s doesn’t deserve the light of day, but it’s been getting a lot of attention.”

Leichtman disputes the data that conclusion was based on. He says his research findings are in line with Nielsen data that the average person spent 142 hours per month watching TV in third-quarter 2008 and that the average person spent six and a half hours watching programs recorded on a DVR, compared to only two and a half hours of TV online.

“And by the way, only a small percentage of online video is television [programming],” says Leichtman. He estimates that nearly half the viewing is of viewer-created videos on sites like YouTube. “You have to put this in perspective.”

SRG says its research isn’t incorrect but simply a different way of measuring the DVR’s impact on TV viewing than Nielsen’s measure.

Yigit notes that Nielsen measures the amount of time people spend watching TV and using DVRs while SRG measures the number of people with access to DVRs and the internet.

“The key finding is that the notion we had for a while, concerning TV viewing, is that the one key time-shifting device is the DVR, somewhere around 25 percent of homes have one,” says Yigit. “But the implication is that 75 percent of households don’t have one.”

SRG also found in its research that 48 percent of respondents to its survey say they find the internet more entertaining than TV, up from 37 percent two years ago.

Moreover, 69 percent of respondents said they expect that every TV show will soon be available online.

“For the younger generation, in particular, we’re finding that the broadband platform is being used more and more as the primary vehicle for television,” says Yigit.

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