It's Not What Everyone's Watching That Counts

It's Where: More and More, It's Online

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YORK, Pa. ( -- Forget trying to figure out what everyone's watching. Today, the more important question is: Where are they watching? And a pair of studies released yesterday agreed that "where" is more and more often online.

In fact, almost 16% of internet households watch TV online, which is almost double the number from a year ago, according to the Conference Board and TNS's TV online study. In-Stat's broader video online study noted that all online video viewing is growing, with the majority of its respondents believing it will become "mainstream."

Free content leads the way
"This is sort of the tip of the iceberg in the growing trend," said Lynne Franco, director of the Conference Board Consumer Research Center. "And it's free content that's leading the way. We found that few people are willing to pay."

Topping the list of what kind of free content was most watched were entire episodes of TV shows, with almost half of the internet households viewing, up from 25% last year. Last year, news was the most-watched TV programming online at more than 62% of households; this year news viewing only topped 44%.

While free content could bode as bad news for TV programmers and networks, one possibility is consumer support for ad-supported content. Although one-third of viewers said they watch online to avoid commercials (the No. 2 reason given behind convenience, which was No. 1 reason to watch online by 60% of respondents), they're not entirely averse to video ads. Recent consumer research from Frank N. Magid Associates found that consumers said they would be most likely to sit through an ad at the beginning of a video they wanted to watch, vs. in the middle, at the end or in between two separate videos. And they like them short: 46% prefer ads to be 10 seconds or shorter, with another 26% preferring ads that are 11 to 15 seconds, according to the Magid survey.

Also reassuring to marketers, for now at least, is that four out of five said their traditional TV viewing hasn't changed even as they watch more TV online, according to the Conference Board survey.

Growing in popularity
Meanwhile, In-Stat's survey found online video growing in popularity, and for the under-25 set, becoming a way of life. Analyst Michael Inouye compared the current video shift to what has already happened in digital music. "These shifts appear far more entrenched than a simple fad, additional reason to strategically review this evolving market and the new levers they bring," he said.

In-Stat also found social networking is playing an increasingly larger role in what young people watch as their online peers' views and opinions influence them.

"Over the next few years, the growing popularity of viewing TV episodes/shows online is going to have a huge impact on the way brands and advertisers communicate with viewers," Shari Morwood, exec VP of technology, telecommunications and media at TNS, said in a release. "If advertisers can effectively leverage the online video platform, we should see much more interactivity and emotional connection between brands and the online TV viewing audience.

And even the ones not watching TV are depending more on the web for entertainment. Overall, 73% of online households said they went online daily for entertainment, with an additional 15% going online weekly for entertainment. Still, it's not all fun and games: Almost 75% said they also logged on daily for work-related activities.
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