Thursday, August 23, 2007

IBM: Internet Threatens To Eclipse TV

Mark Long, 33 minutes ago

According to a new survey from the IBM Institute for Business Value, the amount of personal time that consumers now spend on the Internet rivals the amount of time they spend watching TV.

A total of 66 percent of the new survey's respondents reported viewing television programs from one to four hours per day, versus 60 percent who reported the same levels of personal Internet use. Moreover, researchers said the traditional TV set is increasingly taking a back seat to PCs and cellular handsets among consumers between the ages of 18 and 34.

In addition to conducting the new survey online, IBM researchers stopped young people on the streets of New York to record opinions on videotape. IBM said its informal street sample returned surprisingly similar results to its official survey.

As one of the respondents put it in an IBM video clip now available on YouTube, "If I had to pick between TV and the Internet at this point in my life, I would almost always choose the Internet." When asked why, he replied, "interactivity, for one, and No. 2, my entire life is on the Internet."

Traditional TV's Demise

So are we approaching the end of television as we have come to know it? Keep in mind that IBM's new survey was conducted online, which suggests that its results are skewed in favor of those already tasting the fruit of the Internet's vast global tree.

But with computer prices in freefall and a global push already underway to put computers into the hands of more people in developing nations, the Internet's rise to the top of media markets worldwide might not be as far off as traditional broadcasters, publishers, and advertisers would like to think.

"Just as the 'Kool Kids' and 'Gadgetiers' have replaced traditional landlines with mobile communications, cable and satellite TV subscriptions risk a similar fate of being replaced as the primary source of content access," noted IBM Media & Entertainment Strategy and Change practice leader Saul Berman.

Consolidated Content

IBM's surveyors said that today's Internet audiences are more in control than ever and increasingly savvy about finding ways to filter out marketing messages. And when it comes to mobile and Internet entertainment, consumers say what they really want is consolidated, trustworthy content.

Advertising agencies are going to have to move beyond their traditional creative roles and become brokers of these and other consumer insights, IBM's researchers said. In particular, online marketers will be forced to experiment to find new ways to make advertising more compelling, or risk being ignored.

Moreover, cable companies will need to evolve to embrace home media portals, while broadcasters and publishers will need to move to new media formats that cater to the evolving preferences of today's sophisticated online consumers, the researchers added.

Other TV Viewing Trends

Out of the 2,400 households responding to IBM's survey, which was conducted from mid-April through mid-June, 81 percent said they have already watched, or want to watch, video on their PCs, and 42 percent have watched or want to watch mobile video.

"Given the rising power of individuals and communities, media and entertainment industry players will have to become much better at providing permission-based advertising and related consumer-driven ratings services," said IBM Global Business Services Communications Sector managing partner Bill Battino.

With respect to the digital video recorder (DVR) market, 24 percent of U.S. respondents said that they have a DVR in their home and that at least 50 percent of their TV viewing takes place on replay. The good news for broadcasters is that 33 percent of U.S. respondents reported watching more television content now than before they owned a DVR.

On the other side of the Atlantic Ocean, however, video-on-demand services prove to be twice as popular as DVRs among UK consumers. Moreover, fewer than one-third of UK respondents said they had changed their overall TV consumption as a result of DVR ownership.