Watching TV and Surfing the Web At The Same Time

Did they really underestimate peoples' abilities to multitask? How tough is it to surf the web and watch TV? In our own youth, we listened to radio or watched TV and did our homework at the same time. Could it be that different. The answer is no. But it took a Nielsen study for others to intuitively figure it out.

"The findings, part of a new study released by the ratings measurement company, revealed that broadcasters worried about losing viewers to the Internet may not have to fret after all - and explains a paradox between rising TV viewership and the growing popularity of new media....Overall, Internet usage has grown by about 9 percent compared to last year, the survey found, but TV viewing still dwarfs Internet usage. On average, people spend about 127 hours watching TV each month and 26 hours online."

It is not a zero sum game and internet surfing is not meant to replace TV viewing. And sometimes we even put down our mouses to enjoy the sit back experience of TV exclusively.

Is the Internet Killing Cable TV?

Programmers have been enjoying a duel revenue stream for quite a while; payment per cable customer and advertising revenue. Programmers then introduced VOD and viewers began enjoying video content with limited, if any, commercials to interrupt the flow of the show. And now, pressured to provide content on demand regardless of the device, added their shows on the web with Hulu, Joost, ABC.com, and many, many other platforms to stream and enjoy your favorite TV shows and movies. So why pay for cable when all this content is accessible elsewhere.

For some, continual price hikes from their cable operator has accelerated this desire to disconnect the cable box. The article calls these folks "cable-cutters". TV manufacturers, like Sony, are building TV sets that directly access the web. And don't forget Apple TV either. Tivo has partnered with numerous content providers to bring on demand through the web easily to the TV set. And when broadcasters go digital, video quality over the air will be as good as cable. Consumers are pushing back. "Thousands of hours of TV shows and movies are available for free on the Internet, or via paid download and rental sites — services made possible now that broadband service from cable and telephone companies is widely available. Local stations preparing for the digital-TV transition next year are already broadcasting free high-definition TV, sometimes at a higher level of signal quality than a cable system delivers."

A bad economy certainly does not help this trend. Cable operators have already taken notice. Those that disconnect from taking multiple products from their provider will see their discounts expire and their rates soar for an internet connection. Some will start putting a streaming meter on internet usage. Telcos are providing an alternative to cable in the streaming space. It may spell new opportunities for other wireless distributors to enter the market.

Today, the number of "cable-cutters" may be negligible; still, it is a slippery slope that cable operators should be aware of. First comes dropping premium channels, than dropping to basic service only. Price your service too high and watch the customers leave for greener pastures.

TV Watching and Internet Use Complement Each Other

"According to a new Nielsen report, the more Internet you use, the more TV you watch; 31 percent of in-home Internet activity takes place while the user watches TV. (emailed release)" I look forward to learning more about this report. I never expected to hear that this was a zero sum game; rather, it paves the way for more interactivity on the TV set. Today, I am able to size a TV screen on one portion of my monitor as I surf through the web or work on an excel spreadsheet, the sound of CNBC announcers on my speakers. When I need to answer the phone or watch a video, I simply mute the TV sound. I was raised to multitask and expect that the younger generation is even more adept at it. In fact, I am only surprised that the research doesn't indicate an even higher percentage of simultaneous usage.

Obama Ad Seen By 33.5 Million Viewers

I am not using this blog to endorse a candidate. What I find remarkable is that the Obama infomercial, airing on numerous broadcast and cable networks, delivered ratings that surpassed the normal fare on each network individually. It beat the ratings for Old Christine on CBS, it beat the ratings for Knight Rider on NBC, it beat the ratings on ABC who actually ran their show, Pushing Daisies opposite the Obama program. And on cable, it beat ratings for Keith Olbermann on MSNBC. Wow!

There is an incredible thirst to see and hear these candidates before Tuesday's election. That the interest level drove people to watch TV, regardless of the channel, tells me that interesting programming draws viewership. Does it also say that the current programming on TV today is so unappetizing that people have turned away from TV. Perhaps. I may be a big fan of SNL but how many times can NBC keep running the show on prime time. It may be topical but it may also be overkill. Or perhaps NBC has nothing else to present. "During a season where television hits are hard to find, one NBC executive suggested jokingly Wednesday that Mr. Obama might be invited back to fill the 8 p.m. Wednesday time slot on a regular basis." The writers strike may have done more damage to broadcast TV schedules than we could possibly imagine.

Back to the Obama infomercial, its rating success only lacked local commercial insertion to make it even more profitable. While the programming was duplicative, it is interesting to see where people chose to view the show. It was exactly the same show regardless of where it was watched. It speaks to brand preference and would be fascinating to learn why viewers picked the channel they did to view this show. For me, I picked Fox; Game 5 of the World Series would follow and I didn't want to miss a pitch of this Fall Classic.

New Media's Dirty Little Word...Revenue

Internet users have become jaded; we like getting our content free of charge. Perhaps it comes from being a free TV generation, expecting ads in exchange for shows. Cable television developed the notion of subscription and found that they could push this "membership fee" while continuing to take in advertising revenue too. And so it is not unusual to hear that websites are also looking at subscription to enhance their revenue model. But when usage has been free, what to do. The answer, create a premium account that incorporates added features "-- asking customers to pay for things. Namely: Pro accounts, plus accounts, premium features, enterprise editions, and white label versions." Examples being cited in this article are sites like Ustream.tv, Meetup, vimeo, and others.

Will this please the Venture Capitalists who have been financing these business - absolutely. Content is king...cash is god.

First Disney, Now Tivo Partners With Netflix

Just a week after announcing its deal with Disney, Tivo has announced another major partnership. Joining forces with Netflix to provide the digital distribution arm for movies. And Comcast has announced that it is expanding its rollout of its DVR with Tivo into the Chicago market. Tivo seems to be successfully turning itself into the preferred box for DVR and streaming content, enabling the TV set to access an infinite assortment of content. It seems the only thing missing for Tivo is a partnership with Hulu, followed by putting a Tivo into your PS3!

Back to Tivo and Netflix, it seems like a win-win relationship. "Under the partnership announced Thursday, the latest generation of TiVo's digital video recorders will be able to beam selections from 12,000 movies and TV shows offered through Netflix's streaming service, which must be piped over high-speed Internet connections. TiVo's DVRs will start catering to Netflix subscribers in early December."

At the same time, a number of cable companies have announced that they are raising their monthly subscription rates. In a recessionary economy, is this the right move. While Netflix competes with premium nets like HBO and Showtime, consumers may find that they need to cut back on their spending. One move might be to reduce your cable bill down to basic channels only and buy a Netflix subscription. The cost savings may just be worth the move.

Mourning Old Media’s Decline

David Carr of the New York Times asks an interesting question regarding his article, "Stop and think about where you are reading this column. If you are one of the million or so people who are reading it in a newspaper that landed on your doorstop or that you picked up at the corner, you are in the minority. This same information is available to many more millions on this paper’s Web site, in RSS feeds, on hand-held devices, linked and summarized all over the Web." I am in the minority, I guess. I still get the New York Times delivered to my house and still enjoy reading the newspaper. At the same time, as I share it with my wife, I tend to go to the web to read stories in sections that she may have taken. And when I am in full commuting mode, I just might consider a Kindle to support my reading habit.

Newspapers, like cable television, has enjoyed a two-tiered revenue model of subscription and advertising. The growth of new technology has moved content outside the gated, subscription window, into an open access model. Consequently, the subscription model has lost as it is no longer necessary to "pay to play". Cable operators should take notice of this trend. As video content leaves the gated walls of its liner channel for Hulu and online consumption, the consumer may stop paying for its cable subscription and devotes itself to a web based experience. Any monetization will come from advertising until the industry figures out a new media subscription model.

Web based advertising is cheaper than print advertising. It is far easier to measure hits and target segments. At lower CPMs, it is harder for the gain in web advertising to offset the loss in print advertising. For the print industry today, it has led to a reduction in costs to offset the lower revenues. Mistakenly, some of that reduction is coming in the form of editorial cuts, the writers and creators of content. But without content, what do you have to monetize? "At the recent American Magazine Conference, one of the speakers worried that if the great brands of journalism — the trusted news sources readers have relied on — were to vanish, then the Web itself would quickly become a “cesspool” of useless information. That kind of hand-wringing is a staple of industry gatherings. But in this case, it wasn’t an old journalism hack lamenting his industry. It was Eric Schmidt, the chief executive of Google." Content is king and branded, respected content has value.

Web Video Revenue Problem Solved

How do you monetize web videos; well, according to Silicon Alley its product placement. They cite 6 reasons why product placement works including anti-skip, always connected with the video, and measurable. At the same time, Silicon Alley warns in a separate editorial that product placement can prove embarrassing. Not sure I totally agree; none of their examples seemed horrible. What may be worse is missed opportunities. One example would be M&Ms choosing to not be featured in the movie, ET; instead, Reeses Pieces were substituted as the candy that attracts the alien.

For advertisers trying to determine where to place their brand, the key is that the brand name should already be known and its brand message understood. While an unknown brand may be featured, it may be unrealistic to expect that the viewer makes a connection to the brand and its value or preference. Product placement is not the only way to be successful with web video. Hulu's strategy that less is more, is also proving valuable. Less clutter means more likelihood that the message is heard and the message resonates with the viewer. "Fewer ads make the ones on the site more memorable, Hulu executives say, allowing the site to charge higher prices for the ad units."

Newspaper To Stop The Printing Press To Focus on Digital

The Christian Science Monitor, one of the oldest papers, has made the decision to shut down the newspaper presses by next April and focus its coverage with email and web. Circulation of their daily has dropped to 52,000 and deficits are rising. "The Monitor will announce today that come April 2009, it will fold its tab-sized daily and relaunch as a glossy, oversized newsweekly format, while beefing up its Web site with more original reporting and frequent updates. The globally-focused newspaper also plans to create a daily, paid, e-mail edition that will include top Monitor stories, links to other stories and an original editor’s column."
Perhaps the time is ripe to stop all printing and create an e-version copy instead. The advertising dollar is moving online and their readers seem to prefer getting their CS news from the web. Still for a printing company, it is hard to stop printing altogether. At some point, however, Kindle or the Sony Reader or some other digital device is the next step to enjoy a downloaded copy of the news. That is where this trend is heading.

The CS Monitor is not the first to shut down. "Two smaller dailies have made similar moves in the past year. E.W. Scripps kept Kentucky Post alive at KYPost.com after folding the 27,000-circ paper along with sibling paper Cincinnati Post on Dec. 31, 2007. And in April, the 17,000-circ afternoon Capital Times in Madison, Wis., dropped its freestanding daily edition and beefed up its Web site."