• by kyle , Daisy Whitney , April 2, 2008

Data finds people are tuning in all over

As the world gets smaller, so does the screen. A majority of Internet users — 55 percent — now watch TV on a device other than their TV sets. That could be a computer, a mobile phone, an iPod or some other digital media player (a few of those might even be Apple TVs). That number, culled from a ChoiceStream study late last year, will only get bigger.

“Advertisers need to be thinking about how their TV is being consumed and how to get their brands in front of consumers where the content is being watched,” says Toffer Winslow, executive vice president of sales and marketing at ChoiceStream, a software company whose recommendation engine helps content providers deliver targeted content to consumers. The company commissioned the study of 824 Internet users to inquire about their alternative TV viewing habits.

The shift in TV consumption habits will accelerate, especially given the length of the writers’ strike that started in November 2007 and sent many consumers online to satisfy their entertainment fix over the next several months.

The study found that 36 percent of Internet users are watching TV on their computer and that one-third of that group watches more than four hours a week of TV online. Another one-third of Internet TV watchers view between one to four hours a week on a computer, with the final one-third watching less than one hour a week.
In total, that means 20 percent of all online consumers are watching at least an hour of TV on a device other than their TV set each week, Winslow says. “That’s not a trivial number. You can see why all the big TV producers are getting much more aggressive about the Internet,” he adds.

But perhaps one of the most telling data points is that 20 percent of Internet consumers expect to be watching more TV on alternative devices this year and more than half of those will do so at the expense of watching TV on their TV sets, Winslow comments.

“Advertisers need to be online more,” he adds.

Internet video viewing is also occurring at the expense of cable video-on-demand service, according to a January study from Solutions Research Group. That study found that in November about 20 percent of Internet users watched a TV show online each week, compared to 14 percent who watched a TV show on video-on-demand.  

Broadband is in 60 million U.S. homes now, compared to about 37 million homes that have digital cable, points out Kaan Yigit, an analyst with Solutions Research Group.

“All triple-A network content is up on network Web sites for catch-up purposes now. Only a limited amount of triple-A drama is available on VOD,” Yigit says. “VOD has movies but either they are older than what the customer wants or more expensive than what they want to pay. Twenty-nine percent of those with VOD say the content costs too much. Even though most big cable companies offer lots of free content, there is still a perception that it costs extra money.”

Broadband is also pulling ahead because search is better online and consumers can find content more easily, Yigit says. However, ChoiceStream found that 34 percent of consumers are frustrated with the time it takes to discover content online.

Yet their frustration doesn’t seem to be impeding growth.