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Internet TV Narrowcasting Research Results

As cable TV operators complain of overload with 150 nationally distributed cable networks, narrowcast TV channels are popping up on the Internet, according to Kagan Research.

"This can be pretty targeted content that is not commercially viable if relying solely on cable TV for carriage," says Steve Beaumont, President and CEO of technical services provider Narrowstep. Small cable TV network HorseTV Channel is planting itself in both worlds.

It augments its undisclosed carriage on U.S. cable TV systems with web TV for a $6.95 a month subscription price to anyone with a high speed Internet connection. Narrowstep clients beam web TV devoted to cycling, field hockey, real estate, tourism for Glasgow, Scotland, and the Catholic Church.

These websites incorporate a linear-style TV channel via what Kagan Research calls an "over the top" data stream that flows through broadband. As such, the TV image is mostly viewed on computer screens and picture quality is at the mercy of connection speed.

An advantage to TV in a website environment is channel operators can generate revenue by selling web ads in addition to TV commercials. Beaumont says other potential revenue streams are paid subscriptions for access to premium content, per-program video on demand and interactive e-commerce. Because of the Internet infrastructure, web TV outlets can collect granular data on consumer activities, Beaumont says.

It's too soon to tell if significant audiences will sit still to watch scheduled TV programs originating from websites. But clearly web TV represents a low cost way to deliver TV programming to a geographically scattered audience. Narrowstep's rock bottom service is $5,000 for setup and $5,000 per month thereafter, which buys a limited function channel. Beaumont says more typically clients pay $20,000 for setup and $15,000 per month for full-featured web TV service.

Beaumont has seen some interesting consumer consumption patterns in these early days. In the past 12 months, consumers averaged 1 hour 40 minutes per month per channel, up from 28 minutes a year ago. He credits improved programming and newer channels covering promising niches. "There is no substitute for good content," Beaumont adds.

Another finding is that 79 percent of consumer time is spent watching scheduled TV shows, indicating that some consumers still have a 'couch-potato orientation' despite exploding on-demand options and the mantra that consumers are in charge.

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