• by Lynn Russo , September 21, 2006

Online aggregators increase viewers' control over content

Online TV is coming. Soon TVS will be hooked up to computers, and online content aggregators such as AOL, Google, Yahoo, MSN, and Apple will provide content to larger screens. "Any piece of content on any device anywhere in the world, any time of the day or night - that's what the long-term goal is, and that's where we're headed," says Gerry Kaufhold, principal analyst of In-Stat, a research division of Reed Business Information.

In its latest report, "Online Content Aggregators - AOL, Google, Yahoo, MSN, Apple - Slowly Defining the Future of Television," In-Stat predicts that as early as 2010, as much as one-third of all broadband-connected households will regularly view some amount of professional content - music, movies, sports, or exclusive online information - through online content aggregators, up from 12.8 percent of all broadband households today.

Worldwide broadband households will more than double between 2005 and 2010, growing from 194 million in 2005 to more than 413 million by 2010. The market for online content services is expected to expand by a factor of 10, increasing from 13 million households in 2005 to more than 131 million households by 2010. Multimedia cell phones equipped with video viewing will also see dramatic growth (40 percent of deliveries will be in Japan).

Eventually, TVS will be hooked up to PCs, with the Internet functioning as the control panel, and Web-like portals will be the preferred interface, Kaufhold says. But bandwidth limitations will prevent online from being the primary distribution method. Companies will use the Internet to send messages to other, larger hubs and servers.

Broadcast TV networks will partner with online content aggregators to create "personal TV," moving from one-way programming to interactive engagement with viewers. This will create what In-Stat calls the "audience of one." In the very near future, the report says, "each individual will have nearly total control for finding the programming they want to watch, where the programming comes from, when they watch it, and on what device they watch it."

AOL's In2TV service, with HiQ Video, is an online video hub. Yahoo Go will personalize each user's experience by tying online, mobile, and TV viewing into one connected service, using the PC as the hub. Microsoft Windows Live, Google, and Apple will also be strong players in personalized television. Pay TV services, including those from cable companies such as Comcast and News Corp., will grow more important and will partner with online content aggregators and search engines.

The content will be mostly ad-supported. "People will subscribe to services, and will pay for something really important, like a championship game, but the real power of moving content online is going to be the ability to bring advertising with it," Kaufhold says. "Advertising is going to be key to all of this."

The biggest challenge? Measurement, Kaufhold says. Nielsen Media Research will continue to be the tracking mechanism of choice, particularly in light of Nielsen's new "Anytime Anywhere Media Measurement" strategy, which tracks multiple media use both in the home and out. Companies will also continue to use retail sales figures, online registrations, and page views as leading indicators.