Telco TV: Online video, prime-time TV both growing

ANAHEIM, Calif. – Consumers are most interested in using Internet video to catch up on prime-time television shows they missed, according to consumer research by Parks Associates, which hosted a day-long research workshop at Telco TV here today. That reality creates opportunity for both IPTV providers and content owners if they are able to package content in a way that generates advertising revenue.

One of the real surprises of Parks’s consumer research is that, while Internet video viewing is on the rise, so is viewing of prime-time TV shows, said Kurt Scherf, vice president and principal analyst at Parks. The research shows that 80% of adults in broadband homes do some form of Internet video viewing. Twenty-six million adult home broadband users are watching streaming TV episodes at least once a month, and about 6 million adults in broadband homes pay for premium Web video content on a monthly basis, Scherf said. “When I say ‘adults,’ it’s because we deliberately separated the viewing habits of teenagers and younger people in broadband homes,” Scherf said.

Among those not watching Internet video services, nearly 75% indicated they don’t like to watch video on a PC screen, “So if you can find a way to make this work on a TV screen, they might be attracted,” Scherf said.

“More than one third of those engaged in monthly Internet viewing indicate that they are watching more prime-time TV than they did two years ago, compared to 29% of all broadband users surveyed,” Scherf said. While that’s good news for producers of prime-time content, he added, it doesn’t mean their ad models aren’t shifting, particularly as viewers keep up with their shows via digital video recorders and Web replays.

Of those watching television shows online, just over half (52%) said they were catching up on missed episodes, while 37% liked watching shows for free and 29% appreciated having fewer ads in Web replays. Twenty percent watched the Web when they forgot to record a particular show.