Internet users aren’t canceling their cable for online TV
People are increasingly using the internet to watch their favorite TV shows. Deloitte’s “State of the Media Democracy” study supports that finding, but also indicates they are not using online video to replace TV. Instead, web users are using online video to complement it.
The study found that 20% of internet users had used a show’s website to watch their favorite TV program in 2010. This was an increase from 14% in 2007. Additionally, 21% of respondents used free online video sites like Hulu for this purpose in 2010. Live TV remains on top with 74% watching their favorite TV shows this way. DVR usage continues to grow but remains well behind live TV with only 32% of respondents watching their favorite TV shows via the devices.
When asked about their preferred method to watch their favorite TV show, a question allowing only a single response, the majority of internet users still chose live TV. Using DVRs also remained respondents’ second option. Free online services continued to round out the top three, but with dramatically fewer internet users selecting it as their No. 1 method of watching favorite shows—just 4%. Viewing from a show’s website was even smaller, with only 3% choosing this response.
This data indicates that although more people are watching their favorite TV shows online, they are not likely to be cutting their pay-TV as a result since they still rely on it as a primary viewing method. This could be largely due to convenience. Traditional TV remains relatively effortless whereas online TV may be seen as either too technical or not as enjoyable to watch on a small computer screen.
Estimates released in February 2011 by Informa Telecoms & Media confirm this finding. In 2010 there were only 434,000 cord-cutters in North America and 1.2 million globally—or 0.18% of the global pay-TV market. This number will grow to 16.1 million worldwide in 2015, a rapid rate of increase but still only 2% of the global pay-TV market.
For the foreseeable future, cord cutting does not appear to pose a significant threat to pay-TV. However, people are increasingly using online video to complement TV. For marketers this means that TV remains a safe bet, but online TV shouldn’t be ignored.
eMarketer estimates that 54.5 million internet users watched TV shows online—including at both pay/subscription and free TV sites—at least once per month in 2010. This was 24% growth over 2009. Although this is certainly a smaller audience than the pay-TV market, online TV is not the hyper-niche activity it once was. Also, online TV offers certain advantages over traditional TV. Specifically, commercials can be more interactive and viewers are often more attentive. As online TV continues to grow, it is increasingly becoming worth a piece of the advertising pie.
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Check out today’s other article, “Healthy Growth for Ecommerce as Retail Continues Shift to Web.”