Phil Kurz /
11.16.2009 03:25 PM
Americans to double consumption of TV, movies online in 2009

Americans increasingly are going online to view their favorite TV shows and movies, and there doesn’t appear to be any slowdown of the trend for the foreseeable future.

Findings from a Parks Associates study released Nov. 11 lend credence to the notion. According to the “Broadband, Communications and Entertainment Bundles” study, online viewing of TV and movies will double this year. The research finds more than 25 million broadband households in the United States regularly watch full-length TV shows online, while 20 million regularly watch movies online.

Helping to drive this growth is strong consumer interest in using broadband connections as a sort of virtual digital video server, the availability of full-length HD movies and TV shows from Netflix, Amazon and others, and the availability of affordable set-top boxes that connect to the Internet and remove the personal computer from the equation entirely.

There is a high degree of urgency on the part of IPTV and cable operators to move forward in delivering HD — even at some point 1080p HD shows and movies — via broadband, says Parks Associate research analyst Jayant Dasari. “This is setting the stage for value-added services,” he says. “Operators see this as a way to increase ARPU [average revenue per user].”

For several years, cable TV and IPTV providers have sought to win subscribers over and increase ARPU by bundling voice, video, wireless and broadband. However, because both cable and IPTV operators have rounded out their bundles, the only thing left to compete on is price, he says. The concept of making video — even HD video — ubiquitous via broadband gives operators an opportunity to reinvigorate the business model with new offerings, he adds.

Making this a reality will require a variety of business and technology issues to be solved. On the technology side of the equation, scaling broadband coverage to support higher data rates, new codec efficiencies and affordable approaches to the digital storage needed to serve content and advertising to individual subscribers will be important.

On the business side, renegotiating contracts that satisfy both operators and content owners to facilitate monetizing TV shows and movies on multiple platforms, managing digital content rights and putting in place the business and technology infrastructure to support addressable advertising will be required.

Editor’s note: Part II of this article will examine the technology needed to advance the goal of making anywhere, anytime content access available at the highest quality levels.

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