New Trend Hits Mainstream: People Dropping Cable For Internet Video

Oct 9th, 2008 | By | Category: General, Internet TV, Video

The Wall Street Journal reports that people are starting to drop their cable subscriptions for Internet video:

“I’m saving a lot of money,” says Tony Leach, a product manager at an online stock brokerage firm in the Bay Area. Mr. Leach canceled his $60-a-month cable subscription two years ago and has watched all of his favorite television shows on the Internet ever since.

Complete episodes of about 90% of prime-time network television shows and roughly 20% of cable shows are now available online, according to Forrester Research analyst James McQuivey. There are still notable holdouts, such as Fox’s “American Idol” and current seasons of HBO series like “Entourage.”

This isn’t just anecdotal assumption – hard numbers are emerging to capture the emergent switch to Internet television:

Research firm Nielsen Online estimates that in June, 3.2 million Internet users watched more than 106 million video streams on Hulu.com, a site that wasn’t available to the public until March. Walt Disney Co.’s ABC.com delivered nearly 27 million streams to 2.9 million viewers that same month, according to Nielsen. The data include everything from behind-the-scenes clips and segments of shows to complete episodes.

Other research indicates that online video-watching is cannibalizing television audiences. According to a spring survey by Integrated Media Measurement Inc., a research firm that tracks media consumption, more than 20% of viewers in the firm’s 3,200-person panel watched some prime-time network television online, up from roughly 6% in the fall. Half of those online viewers said they were no longer watching those shows on television.

“What this study is showing is that the long-vaunted convergence of the TV and the computer is happening faster than anybody thought it was happening,” says Tom Zito, Integrated Media’s company’s CEO.

The biggest stumbling block at this point isn’t content, it’s the complexity of getting Internet video to your television.

While first-adopters may be comfortable with kludges like Apple TV and sneakernet video, mainstream users are limited to watching Internet video on their computers, which is not a great way to watch longer videos. Viewing habits are likely to change dramatically, though, as Internet media extenders get standardized and offer access to all Internet media.

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2 Responses to “New Trend Hits Mainstream: People Dropping Cable For Internet Video”

  1. [...] This ‘revelation’ is not such a surprise. And neither is this stat. Don’t get what HBO is waiting for. They’d make a killing in the online subscription format – along with Cinemax! When they offered the first 15 episodes of In Treatment online and on iTunes, I watched them all online. [...]

  2. taniaelis says:

    Been there, done that.

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