There’s an online TV storm a brewin’

March 27, 2009

I wrote earlier this week about how Hulu is now streaming as many views as Comcast does via VOD. But what I didn’t take time to include is the dark side of online TV shows. The fact that many networks are pulling down some of their top shows (e.g., The Mentalist and It’s Always Sunny in Philadelphia.), and how the ads on these wildly popular shows are not all selling.

So I took the time to compile all the evidence that an online TV show storm is brewing and did an analysis for Forrester clients that was published earlier in the month. The great news is that Forrester recently recognized its 10,000th Twitter follower and to celebrate, they let him choose a Forrester report to make available to all of Forrester’s Twitter followers. This individual (@jpthomp on Twitter) chose my report about the coming online TV show backlash. That means good things for all of you, go to the following link to register to get a copy of the report (thanks, jpthomp!). http://snipurl.com/emg3g 

When you get a hold of the report, you’ll see that I envision a lot of experimentation with online show availability throughout the rest of this TV season and possibly even throughout the rest of the year. And with online TV shows failing to sell out their ad inventory, some naysayers inside the major networks are going to be arguing for much more aggressive anti-online measures. We think it will take some time, but online TV can be brought back around again as the recession matures and as executives realize that online TV is not a separate kind of TV, it’s simply the extension of existing TV experiences across multiple platforms. In the report, we sum up the call to action this way:

OUR PLEA: INTEGRATE ONLINE TV INTO THE TOTAL VIEWER EXPERIENCE

If you expect us to end with a summary of all the reasons that online TV shows are the future of TV and a plea to preserve this threatened species, prepare to be disappointed. We said online TV was the most important thing to happen to the video industry not because it was the future of TV in and of itself but because it would help move us quickly into the future of TV, something Forrester calls OmniVideo; this is a state in which consumers can watch TV shows and movies on any platform they want, controlling what, when, and where they watch. In this future, not only will consumers be satisfied, but producers and distributors will make more money than they do today. That’s why we now plead with the industry to quickly learn from the mistakes they’re going to make in the next few months and get back to fully supporting online TV shows — not as a separate business but as an integrated consumer experience that complements and enriches traditional TV.

Check out the report yourself, see what you think. Let’s buckle our seat belts and see what happens over the next few months.


Hulu breaks 300 million view barrier

March 26, 2009

This week, Hulu released comScore’s latest VideoMetrix chart that shows the site broke through the 300 million views in a single month barrier. This barrier is significant for a few reasons: 1) it’s higher than I thought it would be, so I’m humbled; and 2) it’s roughly the same number of streams that Comcast does each month in its onDemand system. To illustrate both points, let me quote myself from last October when Hulu reached a meager 150 million views:

This is phenomenal, it’s precisely the year-end target I had for Hulu in December. Now I have to ratchet that up to 200 million. To go from 0 to 200 in under a year is remarkable. Consider that in its best months, Comcast VOD streams 300 million video views. That’s a big number. Hulu will be at the level some time next year. Without having to invest in VOD servers the way Comcast did. (See my original blog post for more.)

Let me reproduce the VideoMetrix chart (source: comScore, February 2009) so we can do some analysis.

comScore Video Metrix February 2009

Quick note for those new to this kind of stuff, “aHulu (Hybrid)” refers to the fact that some portion of Hulu’s views come from its syndication partners like AOL and MSN. That means any Hulu views that occurred there are not counted there, instead they count back at Hulu. We don’t have any solid estimates of what portion of views are coming from Hulu.com itself vs. its syndication partners, but I have a hunch it’s shifting more toward Hulu over time as Hulu has attempted to brand itself more aggressively.

Looking at this chart, we can do some fun math (I know, not two words you’re used to seeing together). We can see, for example that the average viewer is watching Hulu about 16 minutes a week, far ahead of everyone but YouTube (which accounts for the lion’s share of the Google Sites line). That means the average viewer might watch a show every other week, which indicates the beginning of a habit. Hulu beats everyone else in minutes per stream, at 6.7 minutes, comapred to 3.5 for both Google and CBS. That’s obviously because Hulu people are watching full-length content. Most interesting, though, is the fact that Hulu now accounts for 5% of all online video viewing minutes. The only other site that has more than a single percent of viewing minutes is YouTube, which accounts for 29% of viewing minutes.

Yes, YouTube still rocks the house. But Hulua is clearly the second most important US online video provider. 

And it has only been in business for a year. I’m starting to regret boasting about the fact that I never saw Hulu as a YouTube killer the way some people did when it was first announced. While it’s not technically a YouTube killer (these numbers attest to that), it’s certainly a YouTube distractor since it actually has a model for making money from these views, which  YouTube does not. 

 


2009 is the year of the Connected TV

March 12, 2009

(sorry to long-time readers for the recent radio silence — between traveling and coming down with two successive bouts of some kind of flu, I have not been keeping up my end of the deal. I’ll make it up to you, I promise :)

I wrote about Yahoo’s TV Widget Engine in January, calling it the Belle of the CES Ball. I still stand by the sentiment, so much so that I wrote a very deep dive on the concept for Forrester clients which was just published this week. If you’re a client, check out the report here (and even if you’re not a client, you can see a summary at the same link). I won’t give away the precious detail here, but let me riff about the report’s implications a bit.

The most important thing Yahoo’s TV Widget Engine does is open a platform for innovation in the connected TV space, I said that before in the original post. However, the innovation that will matter most is programmer-led innovation that enhances TV viewing, by adding interesting information and interactivity over the live TV experience.

Why should content owners do this? Becuase this is the first technology innovation in a decade that will actually encourage live viewing of television. 

What do I mean? Already, there are people who keep their laptops on their laps (where else?) during American Idol or Dexter so they can chat with friends or follow Twitter conversations related to the show. NBC even encourages people to text to a special SMS number during Heroes to get special updates and clues during the show. But all of those exepriences are outside of the TV screen and therefore limited to the few people willing to manage multiple devices. Imagine if broadcasters and programmers could do the work for you, overlaying the experience on the TV screen to increase your enjoyment of the show — as well as your desire to watch it live when the online buzz is the greatest.

The problem is we have a short window in which content owners (networks, producers, publishers, etc.) can establish the habits that will favor them in the long run. If they don’t catch on quickly, they’ll miss this chance to drive *gasp* actual live viewership and instead, technology innovators will focus on widgets that deliver other benefits that aren’t programming-centric. I personally think weather, horoscope, and personal ad widgets — while of interest to specific subgroups — will never catch on on the TV to the degree that program-specific widgets will. Why? Because people watch TV to watch TV, not read the news or scan personal ads. That’s what the PC is for.

Am I right? We’ll find out soon enough because Verizon just announced that later in the fall it will be pushing an open-widget development platform to its Verizon FiOS TV customers’ set top boxes. For those who did not know, Verizon has been developing widgets since 2006. However, the widget environment was proprietary and did not allow outside parties to contribute. Verizon has changed that with this latest version and as a show of force, it has built a Twitter widget designed to automatically scour tweets to find any that mention the show that you are currently watching — change the channel, and the widget will search for and display any new tweets related to the new show on your screen. 

This is a genius move. It demonstrates the value of synchronizing widgets with live TV without waiting for the Yahoo! widget platform to find its way into homes.

If I’m right (and Verizon finds a way to let customers know about this feature — which is always a problem when you push free features to set tops, most people never know they’re there), Verizon’s 1.6 million customers will be a very attractive test best for interactive TV widgets. If you are a developer, get hopping, let’s see what you can do.