Cisco Report Proves 2012 Was Another Very Good Year for Professional Online Video Fare

by P.J. Bednarski, Dec 26, 2012, 10:00 AM

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Did you get or give a DVD for Christmas this year? Probably not, given the crowd that is likely reading this, but you probably would have given the same answer if you weren’t somehow connected to The Biz.

In fact, though home video sales had a comparatively good year, cresting at $18.7 billion, that’s the best it’s done since 2009. It’s far off the torrid $21.4 billion the home video industry grabbed in 2004 when it seemed like there was a future for it.

Double-digit declines in DVD sales ended in 2012, but no one is predicting a lot of uptick for the industry. Rick Newman, US News & World Report chief business correspondent, asked industry research firm IBIS World to predict the 10 Worst Industries of 2013. “Recordable media” came in tied for first with “Photofinishing,” --what do you know, it’s a photofinish!—with both predicted to have a 15% decline in jobs.

“DVD and video game rental stores are becoming scarce, and the DVD-by-mail business, which seemed revolutionary a decade ago, is now becoming more and more antiquated with each passing day,” Newman wrote.

It’s no surprise a lot of those former DVD consumers are still watching films and TV shows, but either streaming or downloading them,

That is the backdrop for Cisco's recent report, “The Upward Arc of Online Video, Driven by Consumers” which featured the results of a survey of 1,152 broadband users over the age of 13,  and also including people 75 and older, pertaining to where and how they watch professionally made videos.

Chris Osika, senior director global leads of the service provider practice Internet business solutions group thinks Cisco’s new study shows just how much good content is now available online and thinks consumers are ready, but careful about the next improvements.

Seventy percent of all broadband consumers watch an average of 100 minutes of online video weekly. But 30% (I’m trying not to write “whopping” anymore) of 18-to-24-year old consumers consume a (whopping) four hours or more a week.

Altogether they spend 13.8% of their time spent watching video that they stream or download. Now, only 10.9%  of the video they see is on DVDs or Blu-Ray.

Internet streaming alone, in fact, now equals the time consumers spend watching videos on DVDs or Blu-Ray.  

Cisco finds it significant that 42% of Hulu’s consumers  prefer the basic version—free, but with commercials—rather than Hulu Plus, the fee-based version that only grabs 9% of them.

In almost all the ways content marketers can mix it up, free video (or its closest proximity), is preferred to paying for it, and  Cisco thinks that should continue.

For a lot of reasons—but basically for fear of  viruses—almost three out of four American consumers are  fearful of peer-to-peer sharing.  (And 58% of them think it’s theft of copyrighted material.)  

Cisco says consumers basically expect “catch-up TV” capability to be a free service and ditto with the ability to watch a show whenever they wish. That, the report says, is  needed “just to have a seat at the table.”

But consumers are more likely to pay for a demonstrably better technological experience, or a superior library and search capability.  

As for the content itself, 74% of those using the Internet to access professional video are using it to watch TV programs weekly, and 42% of them do it daily. By contrast just 52% use online video services to watch movies weekly, but just 12% daily.

In a rather direct way, that should comfort the television industry. Perhaps broadcasting and cable are losing audience in the traditional sense, but pretty clearly, Americans still love television. It just has to be on their schedule, and preferably, they don't want to pay for it.

pjbednarski@comcast.net

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