TV time seen growing faster than Web

TV time seen growing faster than Web

By Michele Gershberg

Thu Nov 29, 2007 2:28
PM ET


tvtimeseengrowingfasterthanweb.jpg

A family watches TV in their basement
apartment in Addison, Illinois, March 21, 2007. Time spent watching television
will rise faster than leisure time spent on the Web through 2012, while a major
audience for Internet video could take even longer to develop, consultancy Bain
and Co said on Thursday. (John Gress/Reuters)

Time spent watching television will rise faster than leisure time spent on
the Web through 2012, while a major audience for Internet video could take even
longer to develop, consultancy Bain & Co said on Thursday.

According to data exclusively released by Bain at the
Reuters Media Summit in New York, U.S. viewers on average will spend nearly two
more hours per week watching television by 2012, fueled by growth in
video-on-demand choices and the use of digital video recorders.

In that same time frame, Internet use outside of the office
is expected to rise by less than half an hour per week.

The data could be sobering to TV networks and Web media
companies, which are investing heavily in Internet video sites and testing ways
to make money off them through advertising.

David Sanderson, head of Bain’s global media practice, said
the prospect for Internet video to become a viable alternative to the broadcast,
cable or satellite signals into viewer’s homes could take five years or more to
materialize.

"There are capacity constraints, the technology isn’t quite
there … and frankly the business models for the content owners, all of that
still needs to be worked out," Sanderson said at the Summit.

"Until that’s worked out and until the Internet can deliver
that same experience, then it’s still going to be delivered over the traditional
multichannel video providers," he said.

Sanderson noted that uptake of video services provided by
telecoms companies, such as AT&T Inc’s U-verse or Verizon Communications
Inc’s FiOS, and further growth in the market for high-definition, flat screen
television show that the traditional TV market should remain durable.

"The TV experience delivered by the multichannel video
providers continues to get better, so it’s going to take a while for that to
really change," he said.

News Corp and General Electric Co and Vivendi’s NBC
Universal are testing a joint online video service called Hulu, while rival
Viacom Inc aims to put as much of its video as possible online. Walt Disney Co’s
ABC also puts prime-time shows online.

Web search leader Google Inc. bought fast-growing
video-sharing site YouTube last year based on expectations that online video
would become a strong competitor to television.

While the Internet should become a more robust outlet for
video in the future, people today are mostly using it to watch clips of shows
they missed on TV, Sanderson said.

"People are spending time watching YouTube videos, but the
amount of time they’re spending is … almost negligible relative to the time
they’re spending watching professionally generated television," Sanderson
said.

(Additional reporting by Ben Klayman, editing by Gerald E.
McCormick)

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