Technology | Media | Telecommunications

Friday, December 19, 2008

The Whole Truth about Online Video Usage

There's still much to learn about the ongoing evolution of online video usage. As an example, Americans have embraced streaming video, often at the expense of video downloading.

A market study by Ipsos found that 57 percent of U.S. Internet users 12 years of age and older have streamed video in the past 30 days -- 7 percent higher versus the end of 2007. In comparison, only 22 percent have downloaded video in the past 30 days.

One commonly held belief for long-form video formats, such as movies and TV shows, is that they benefit the most from downloading -- since it allows consumers to save their downloaded videos, and have the ability to port these videos to other devices.

However, it is clear that consumers are seeking other alternatives rather than paying the current prices associated with a movie or TV show download. In addition, many consumers may be reluctant to download large videos due to potential storage and portability issues on their PCs and portable devices.

Apparently, few downloaders and streamers have ever burned their videos onto DVD or transferred them to other devices. Therefore, this data raises further questions about the big media studios longstanding fears about video copying practices.

The Ipsos analysis revealed that a majority (59 percent) of downloaders and streamers would prefer to have physical copies at current download prices. Since many consumers do not have the ability or knowledge to create a physical copy from a download.

"U.S. consumers have shown their willingness to adopt new technologies, as demonstrated by their use of the myriad of digital services offered by the Internet," explains Brian Pickens, Senior Research Manager at Ipsos MediaCT.

"However, consumers need that initial trial incentive, and offering movie downloads at a price lower than DVDs would help drive trial usage. While there may be a cannibalization concern for physical DVDs by lowering the price for online movie downloads, a strong demand for physical DVDs remains. The movie download option could prove to be a significant revenue source for the studios."

When considering TV shows, past 30-day program streaming currently resides at a quarter (25 percent) of the streamer and downloader population, which is double the proportion seen in early 2007 (12 percent).

It's clear that the free streaming offered by the major TV networks is having a profound impact on the digital video industry, as those who miss a single episode of their favorite program can view the episode they missed and do not feel the need to own it.

A key finding in the Ipsos research is consumer willingness to pay for Movie or TV Show streams. Ipsos MediaCT also analyzed the ideal pricing for a monthly subscription based service to an online website with unlimited streaming of movies, TV shows and other events.