Online TV Revs Hit $1.6B, But Networks Move Cautiously

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Major growth of U.S. online television has pushed the business to $1.6 billion in all revenue in 2010.

The online revenue rise -- a strong 34.2% gain over 2009 -- came from both advertising and consumer fee revenues, according to IHS Screen Digest. One highlight of this growth was in advertising sales, which climbed 64.7% to reach $719 million in 2010, up from $436.8 million in 2009. Other surveys note that all U.S. digital video advertising was over the $1 billion mark for 2010.

Still, the analyst says the big TV networks are moving slowly.

IHS Screen Digest notes that Hulu -- a partnership that includes three of the four big TV networks, Comcast's NBC, News Corp's Fox, and Walt Disney's ABC -- doubled its advertising revenue growth in 2010 to $200 million.

But looking at one key measure -- total views on Hulu -- IHS believes this is an indication that TV networks are less aggressive in their approach to digital video. Hulu's total number of "views" for all content only rose by 10% to reach 3.6 billion.

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"The relatively modest growth in the streaming video area reveals a still tentative approach toward the Internet from some big media companies, which are reluctant to jeopardize their lucrative cable carriage deals by aggressively pursuing online opportunities," stated Dan Cryan, senior analyst and head of broadband media at IHS.

Telling evidence here is that broadcasters are reluctant to use their big advertising vehicles -- their network commercial inventory -- to promote their digital video.

Some positive notes: The CW, which this year began running a full load of online commercials -- 23 individual advertising messages -- similar to that on traditional TV, grew more than 300% in revenue to reach $16.5 million.

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