I have been looking at some recent research regarding online video consumption. Yes it is growing explosively (+40% year over year.) But it is definitely following the laws of “if you have a little and it grows a lot, you still probably have a little.” It’s like when your favorite stock goes up 50% in one day, from $1.00 to $1.50. Sounds big, but in the scheme of things, not really.
When I asked a sampling of friends here in NYC what percent of their total video viewing is online versus TV, responses ranged from 15% - 50%. (I am leaving mobile out of this discussion for now.) Seems my sample was skewed towards early adopters or the results reflect the enormous inaccuracies of memory based data.
The actual number, across the entire population – 1%!
This from a recent well documented study by a big name research organization. Another study showed online’s share at 2%. Like that micro cap stock, even 50% year over year growth doesn’t have that big an impact.
98% of video consumption is still happening in front of the television. Looking at another way - the average American watches nearly 160 hours per month of TV and just over 3 hours of Internet video.
No wonder the television upfronts seem relatively healthy with broadcasters and particularly their stronger cable network siblings feeling upbeat.
Is there a huge disruption lurking?
I think so. Everyone online is watching video. (80% of web users according to the latest data) They are just taking lot of small bites – 3 minute clips of Sarah Boyle, or a 2 minute news segment from Iran, or a user generated clip emailed from a friend.
It just doesn’t add up to whole lot of time and most of what is being viewed is still user-generated with poor production values.
A few things need to happen to significantly move the needle. First, more professionally produced (30 Rock, Heroes, etc) and semi- professionally produced (Next New Networks, My Damn Channel) content needs to find a home and an audience on the web. (Hulu, for all its success and publicity still only generates a fraction of the total online video viewing.)
Second, viewers need to begin looking at their computer as more of an entertainment viewing device and hub – watching in full screen format (as opposed to a 300X250 pixel window) and connecting to their home TVs using new applications like Boxee and the Hulu desktop.
If online viewing is 2% now, where will be in 12 months?