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Online Video: A Changing Picture

Posted by Mort Greenberg on February 27, 2008

source: eMarketer

Online Video: A Changing Picture

FEBRUARY 25, 2008

Coming soon to a screen near you: Convergence.

The term “convergence” may sound retro, a notion tossed around in the 1990s that never really came to pass. But don’t be fooled.

Today, the bulk of video consumed online is snackable video—bite-sized entertainment—rather than a complete meal of full TV episodes or full-length movies.

Types of Online Video Content that US Online Video Viewers Watch Monthly or More Frequently, 2007 (% of viewers)

The most popular online video content, watched by 40% or more of the US online video audience, consists of short pieces of five minutes or less: news clips, jokes, movie trailers, music videos, clips from TV shows and entertainment news.

”As technology problems are solved, however, making the computer-television connection more viable and pleasurable for the average consumer,” says David Hallerman, eMarketer Senior Analyst and author of the new report, Online Video Content: The New TV Audience, “online video content will expand in both length and breadth, and professionally-produced material will account for a large part of the menu.”

It hasn’t happened yet, but full-blown convergence between television and the Internet is on the way.

”The trend toward greater video convergence is being driven by factors such as broadband, digital TV and, ironically, the fragmentation of the audience,” says Mr. Hallerman. “Fragmentation is forcing traditional television players, the networks and studios, to reach out where the audience lives.”

And, increasingly, the audience’s entertainment life is found on the Internet.

A survey of viewers by TNS uncovered a number of reasons for watching less television.

Reasons that US Online Video Viewers Watch Less TV* Compared with a Year Ago, July 2007 (% of respondents)

According to the most recent “The State of the Media Democracy” report, from Deloitte, most US consumers would like to be able to easily connect their home TVs to the Internet to view video, with younger users the most keen to connect.

Attitudes of US Internet Users toward Digital Entertainment, by Age, October 2007 (% of respondents*)

”Unfortunately, ‘easily’ is not readily achieved at this point,” says Mr. Hallerman.

Among the households watching video on their computers, the vast number still watch on the Web, using their browsers, while less than 10% use some kind of TV connection, according to the “Digital Content Unleashed” report from ABI Research.

Methods Used by US Internet Households to Watch Video via PC, Q2 2007 (% of respondents)

”People lean toward the Internet over TV when it comes to elements such as convenience, control and the ability to easily find enjoyable content,” says Mr. Hallerman. “TV video content wins out for relaxation, sharing the experience with friends and family and less annoying advertising than online.”

The technical and viewer preference obstacles to convergence are many, and they won’t be overcome easily or quickly.

”Surveys have found that already roughly half of all US consumers who watch video watch at least some of it online,” says Mr. Hallerman. “That percentage isn’t going down, and the desire for convergence isn’t going away.”

See how the entertainment picture is expected to change in the future—and what those changes will mean for producers, distributors and advertisers. Download the new eMarketer report, Online Video Content: The New TV Audience, today.

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