Web video attracting broad band

Media biggies stream into biz that saw 7 bil U.S. views in March

Several years late for the likes of Pop.com, Icebox.com and other sites trying to earn a buck from it, Internet video has finally become the killer application that just about everyone in the entertainment industry knew that it someday would be.

In March, seven of every 10 Internet users in the U.S. streamed at least one video online, with the average "streamer" viewing 55 videos during the month, according to digital measurement service comScore.

Such audience statistics clearly announce the arrival of online video as a mass medium worthy of attention, ac-cording to ob-servers. And it is why media and entertainment giants are pushing into the Internet video space aggressively these days.

For example, CBS said in April that it will partner with AOL, Microsoft Corp., Comcast Corp., Joost and others to distribute its video all over the Web. Shortly thereafter, NBC Universal partnered with News Corp., CNET Networks, Comcast Corp. and others to do likewise.

The 126.6 million U.S. streamers in March, according to comScore, each watched an average 145 minutes of online video during the month.

The biggest beneficiary was Google Inc., whose sites streamed 1.2 billion videos out of the total 7 billion streamed by Americans in March, or 16.7% of all online videos initiated, comScore says. Credit Google's $1.65 billion acquisition of YouTube for the vast majority (1.1 billion) of those.

In second place were sites owned by Yahoo Inc., which streamed 434 million videos, followed by Fox Interactive Media (421 million), Viacom Digital (260 million) and the Time Warner network (222 million).

Walt Disney Co. sites operated by Disney Online, ABC.com and ESPN streamed 237 million videos. ComScore separates them, which is why Disney isn't No. 5 on the list of biggest providers.

Now that video on computer screens is a mass medium, some are banking that broadband content on TV screens will be the next big thing.

"There's no question it will be very successful," TVPredic-tions.com president Phillip Swann said. But while he believes that Comcast, DirecTV and other pay TV services are poised to benefit most from the popularity of broadband video, Cody Willard — a hedge fund manager who founded RevolutioNetwork.com, a user-generated commercial video platform — said content owners will reap the most profits.

"They have an addressable market that's about to have instantaneous gratification for anything they want, and they'll monetize it," Willard said. "Like with YouTube, any site large enough to matter will either get sued or go legitimate."

He likes Lionsgate and Disney for their content and News Corp. for its "guts to cross-promote."

Willard also is skeptical about cable and satellite TV providers because broadband video isn't something they can easily control. "Comcast is so visionary they might be reacting quickly enough, but the average cable company will be undermined by these open platforms," he said.

He even predicts that American consumers will begin shedding their pay TV subscription services in as little as two years in favor of using their TV sets to view broadband content on-demand.

Also stalking online video is Apple Inc. with its Apple TV, which moves iTunes content to TV screens and recently said it will do likewise for YouTube videos. And then there's TiVo Inc., which has partnerships with the NBA, the New York Times, CNET and others to bring their broadband content to TV screens. TiVo also has partnered with Amazon.com to digitally distribute 10,000 movie and TV titles — and counting.

"We're talking about something that puts cable video-on-demand to shame," TiVo CEO Tom Rogers told analysts last week.

Like Willard, Rogers sees a big opportunity for companies that boast great content. Unlike Willard, Rogers sees benefits for cable TV providers as well because they "won't sit there and allow broadband video directly to the TV be offered by others and not offer it themselves." As pay TV em-braces the idea, it will look to TiVo, which lets users seek, record and organize broadband content just as it lets them do with TV, he hopes.

"This is way beyond the YouTube phenomenon," Rogers said. "This is the best of the best of video being available in the broadband world."

Rogers also took a swipe at the competition, calling Apple TV a mere "appendage to your computer," while saying that broadband content on TiVo is a "much more television-centric" experience.

Naturally, Apple CEO Steve Jobs seems pretty impressed with Apple TV, calling it "sort of a new DVD player for the Internet age."

Some outside observers agree with him. "Apple TV is the primary source of movies in our home," said Tim Napoleon, a product line director at Akamai Inc., a company that delivers as much as 20% of the Internet's traffic each day. "We don't even have a DVD player hooked up anymore. My other favorite toy is TiVo."
comments powered by Disqus