Monday, May 21, 2012

Is Online Video Consumption A Zero Sum Game?

As online video consumption grows at a double digit pace, one wonders if this growth is at the expense of other activities or specifically other television viewership activity.  Are these viewers bypassing traditional TV time for online or tuning in outside the window when they tend to watch TV?  For me, I don't yet believe it is a zero sum game yet.  With access to the internet, employees that never had TV access in their offices now can consume online video on their lunch breaks and other down times.

While some of that video consumption may be at the expense of TV, it is  not yet a 1 for 1 tradeoff.  In fact, some of the  growth by folks like You Tube are at the expense of other online video platforms.  "Music video giant Vevo, for example, saw its unique viewers plummet 10 percent to 49.5 million over the same period, while its average viewership time declined by 41 percent to 57.9 minutes. (The comScore report doesn’t track mobile usage, so it’s hard to tell how many viewers are migrating to mobile platforms.)  Also, Viacom digital, the leader among traditional media companies in the digital video realm, saw its average viewer time drop 27 percent to 58.9 minutes (unique viewers were flat year over year at 41.2 million)."

For content creators, the rise of online video consumption means that the content you create for one platform, television, needs to be accessible on other platforms too.  Where consumers once followed content, content must now follow consumers.  Whether that availability is a subscription experience, an authenticated one, or even free, is part of the broader video strategy a content company sets to fully monetize its video content.  And that is more than just cable license fees; it is also video ad revenue, syndication revenue, promotional support, e-commerce, and integrated banner and overlay revenue.

Today video consumption is not a total zero sum game, but it is certainly leading to that level.  There are only so many hours in the day and only so much time that can be devoted to watching videos.

MSOs Add Another Benefit To Their Broadband Subscription

While cable subscription growth continue to evade the MSOs, broadband subscription has been rising.  To add incremental value to an ever increasing mobile population, the major MSOs will now be sharing access to their WIFI hotspots.  "Under the banner 'Cable WiFi,' Bright House Networks, Cablevision, Comcast, Cox Communications and Time Warner Cable will be able to access WiFi hotspots outside their home market." And as these MSOs cover most of the major DMAs, this shared access is certainly good news for its subscribers.

So a quick look at the list and the notable missing MSO is Charter Communications.  Was Charter even approached to join the group or purposely excluded?  And what about the smaller MSOs, fighting hard against the same competitiors as these major entities.  Will folks like Mediacom, Atlantic Broadband, and others get an invite to this WIFI table?

Certainly, for this initial group of 5, a shared WIFI approach is a smart marketing move to compete against its rivals.  As we utilize more mobile devices, access to WIFI is critical; especially, as cellular data usage plans causes us to seek WIFI alternatives so as to not go over our plan limits.  And with profit margins high on broadband subscription, this added value should be actively marketed to assure even more consumers subscribe.