Online movie, TV watching doubles households

DIGITAL: Study shows industry needs to find better business model

By Susanne Ault -- Video Business, 11/11/2009

NOV. 11 | DIGITAL: U.S. broadband households watching TV shows and movies online has doubled over 2008, according to a Parks Associates study.

More than 25 million U.S. households regularly watch full-length TV shows online, and more than 20 million watch movies. Parks singled out free, ad-supported online video-on-demand site Hulu.com as driving people to watch such programming on the Web.

Parks urges pay-TV channels and cable/satellite video-on-demand services to offer online and mobile video features to match consumers’ growing taste for the Web.

However, TV/film distributors need to improve the way their content is monetized within surging online media, Parks says. At this point, ad revenue from many of the most popular free-TV/film Web destinations are not yet a big business driver for the studios.

“Consumer interest in time-shifting content through online portals has increased significantly,” said Jayant Dasari, research analyst at Parks Associates. “Close to 40% of broadband households today watch full-length television shows over the Internet. Enabling access to content anytime through any broadband-enabled device will be a significant challenge for the service providers. However, broadband video opens new revenue channels and opportunities to upgrade subscribers into higher tiers of services.”

The next step, according to Dasari, is for content owners and distributors to come to a consensus on business models so they can monetize consumer interest in online media.