Another one bites the dust – TV is getting disrupted by the Internet
Last year I did a survey in my New Technology class asking about video rentals (see So, who goes to the Video Rental Store anymore?). The trend was clear: nobody goes to the video rental store anymore. This year I asked about TV. The basic question was how many hours do you watch TV each day. Again, some interesting things are happening. As it turns out TV watching is declining and viewing is going to the Internet. But only partly as it seems that viewing TV content is just declining.
With TV I mean the business model of pre-programmed schedule supported by ads or subscription fees. This model clearly does not attract the university crowd. The average time people in the class watch TV per day is 1.2 hours, compared to 1.6 hours per day last year. This is a 1/3 decline. The number of participants that don’t watch TV at all are 40% with 5 hours as the other extreme. Viewing 1.2 hours per day is much lower than the widely believed 3 hours per day which is the average viewing.
These numbers don’t mean that participants don’t watch video anymore. In fact viewing has not declined – it just moved. Now the Internet is taking the TV business over.
It is not hard to image why. Internet viewing is increasing and the statistics support that. According to OECD, broadband penetration of households in many European countries and in the US is approaching 70%. Worldwide there are about 1.7 million Internet users, 25% of the world’s population. But the interesting fact is that the rate of adoption is increasing exponentially.
This is leading to a shift in how people consume entertainment. World-wide, nearly three out of five youth consumers logged on to YouTube to watch a music video in the last 12 months, compared to 56% who watched a music TV channel. According to YouTube people upload 20 hours of videos every minute.
But why would people prefer Internet viewing to quality subscription based model. Here are some ideas:
Time shifting – people don’t need to wait or change their schedule to fit the program. They just watch whatever they want to watch when they feel like it.
Personalization – TV is traditionally about group viewing. With a large screen in the living room or den, watching TV is not a personal experience. There are not many shows that the whole family prefers to watch together. With so much variety of shows, they appeal to different age groups and to different cultures. Thus individual family members prefer watching their favorite show.
Fragmentation – Watching according to a periodic schedule is the TV station’s way to build the programming. Each week a new episode in a series is shown. But what if you want to watch the next episode? You just can’t wait a week. Of course, for new shows you might have to. But for older shows why fragment the viewing?
Another interesting thing in this survey was that viewing on the Internet seems to rise only slightly. If this has any meaning it is that participants are not viewing TV shows in general as much. Participants spent on the average 1.1 hour a day playing video games. And if you count only those that played, the average is 2 hours per day.
The trends here are clear. TV watching is declining and so is viewing of TV shows in general. People are get more entrainment on the Internet, including games and social interactions. Entertainment is getting more diverse.