Cable Operators

Over-The-Top Goes Mainstream

4/18/2011 12:01 AM Eastern

Someday that familiar query of “What’s on
TV?” may evolve into something like, “What’s on the Internet?”

About 77% of consumers now watch over-the-top video
on a PC or TV, according to an Accenture survey of 6,550
consumers in seven countries.

The behavior still skews young: 85% of respondents between
18 and 24 access and interact with video on desktops,
laptops, Internet-connected TV and mobile devices,
while 82% of those 35 to 44 do. About 64% of consumers 65
and older watch Internet video, Accenture found.

And traditional TV remains the most prevalent means of
video consumption, with 92% of respondents saying they
watch video this way.

But fundamentally, the survey results show that Internet-
video viewing spans all age groups, according to
Francesco Venturini, global broadcast lead of Accenture’s
Media & Entertainment industry group. “Consumption of
video over the Internet is no longer a millennial-generation
phenomenon,” he said. “Video over the Internet is well
on its way to becoming a mass medium.”

The numbers are pointing up across the board. In March
2011, 144.2 million Americans watched 14.5 billion online
video streams, according to Nielsen. That’s an increase
from 131.7 million U.S. Internet viewers who watched 9.3
billion streams one
year ago.

Revenue from online
television in the
U.S. jumped 34%
last year, totaling
$1.6 billion for 2010,
according to figures
released last week
by IHS Screen Digest.

But in terms of
time spent viewing,
traditional TV still
outstrips online.
U.S. online viewers
spent an average of
14.8 hours watching
Internet video for the month of March 2011, according to
comScore — but Americans currently spend an average
of 35.6 hours per week watching television, Nielsen fi gures
show.

BEYOND THE TUBE

Still, Accenture’s survey found that in the past year, viewing
video on nontraditional devices is trending upward.
Viewing increased on laptops (35%), desktop PCs (28%)
and Internet-enabled TVs (26%) across all age groups.

“Consumers are possibly more sophisticated than
content owners or operators believe,” Venturini said.
“Consumers are strongly indicating that they are
ready for a true multidevice experience.”

The consulting firm released the results last week
as part of pitching its outsourced offering, dubbed
the Accenture Video Solution, aimed at letting service
providers, entertainment companies or retailers
deliver both linear and on-demand content to TV sets
as well as PCs, mobile, gaming consoles and broadband-
connected TVs. New York-based Origin Digital,
an Internet-protocol video-broadcasting provider that
Accenture acquired in 2008, will provide streaming
and hosting for the solution.

Pay TV operators are responding to rapidly shifting
consumer expectations. But because of programmingrights
issues and the need to develop the technical infrastructure
to deliver “TV Everywhere” services, not
everything available on TV will be coming to PCs, Internet-
connected TVs or other devices right away.

For example, Time Warner Cable and Viacom earlier
this month sued each other over the MSO’s iPad app,
which lets subscribers view live TV in the home. TWC is
seeking declaratory judgment from a federal court that it
has the right to distribute Viacom’s programming to any
device in a customer’s home, while Viacom filed a lawsuit
alleging breach of contract and copyright violation.

VIDEO EVERYWHERE

Comcast, for its part, is focusing first on delivering on-demand
programming over any Internet connection, wherever
a customer happens to be.

This month, the operator boosted the amount of videoon-
demand content available through its Xfinity TV app
for the iPad to 4,500 hours — from 3,000 when it launched
two months ago — but live TV on the tablets won’t be
available until later this year. Comcast spokesman Peter
Dobrow confirmed that the company still plans to launch
in-home access to live TV in 2011 through the iPad app
and to other devices.

To distribute video to a variety of devices, Comcast is
cutting over the Xfinity TV authenticated online video service
to Microsoft’s Internet-streaming platform, which the
operator’s thePlatform subsidiary has integrated into its
video-management system. That replaces the video player
from Move Networks, which was acquired earlier this
year by EchoStar Technologies.

“We’re always looking at technologies that will help us
deliver high-quality, premium video to a broad range of
IP-connected devices,” Charlie Herrin, Comcast Interactive
Media senior vice president of product development
and technology, said.

Consumers are certainly ready, said Accenture’s Venturini,
and “in some instances may be ahead of the industry
in terms of the vision they have for how, when and
where they watch and interact with video content.”

September