Which way is the wind blowing when it comes to Web video versus TV viewing?
Like many of you, I have been reading and hearing a lot about how folks in the U.S these days, particularly younger ones, are using their computers to watch a lot of their video, including shows that they used to watch on their TVs. I am sure that this is true. I know a lot of folks who regularly use services like YouTube, Hulu and Boxee. I know even more folks who tell me that their children are watching a lot of video that way. However, I have always wondered whether actual Web video viewing patterns actually matched up to all of the hype surrounding the platform.
Apparently, my skepticism was warranted. Earlier this week, on The Ad Contrarian, I read a review of Nielsen's "Three Screen Report" for the first quarter of 2010 that highlighted a couple of really powerful data points in the report. First, as has been widely reported, TV viewing time in U.S. homes continues to increase, growing 1.3% (or an incremental 2 hours per month) year over year. During the same period, Internet video viewing time grew 5.9% (or an incremental 11 minutes) year over year.
Who would have thought the average increase in time that Americans watched television in early 2010 compared to early 2009 would be over ten times more than the average increase in time for watching Web video? Not me. I'm particularly surprised that Web video viewing only grew 5.9% over that time, when it was coming off such a small base. Web video viewing still represents less than 2% of the time that folks in the U.S. devote to consuming video.
Maybe a lot of that Web video time has shifted to mobile devices? Smartphones are exploding, and many millions of us now carry iPhones, BlackBerries or Droid, or similar phones capable of playing video. Nope. The Nielsen report tells us that there was no growth in subscriber mobile video consumption over the past year.
This is important stuff. As we all know, a lot of media and telecommunications companies, and a lot of their executives, are in the process of making some really big decisions about where they should be focusing their video resources now and in the future. If you're a studio, do you produce short-form products for the Web and mobile? If you're a TV network, do you push your video onto the Web to try to capture early audiences, even if this undermines the multibillion-dollar relationships that you have with cable and satellite operators? If you're a multichannel TV operator, do you make massive investments to build or partner for a "TV Everywhere" platform, to ensure that Web-only viewers are satisfied, too?
A lot of big bets are going to be made by these companies. A lot of big risks are going to be taken. If these companies and their executives are making decisions under the impression that Web video viewing is exploding in America, and TV viewing is falling, the recent data suggests that they are wrong -- and they may be in for a rude awakening when their Field of Dreams is built and no one shows up. What do you think?