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The Future of TV: Technology puts the consumer in control

  
  
  
  
  
We at the beginning of a radical change in the way television is perceived and used by both consumers and marketers. The end result will be the eventual merger of television and the internet.  It has already started with technological advances driving new consumer behavior.  A new study from the Pew Internet Project sheds light on some developments:
62% of adult Internet users have watched video on an online video sharing site.  This number jumps to 89% among 18-29 year old consumers.  Watching online video activity out ranks the use of social networking sites, podcasts and Twitter.
35% of adult Internet users have watched TV shows and movies online on sites such as hulu.com.  For the 18-29 set the number jumps to 61%.  Among those adults who watch TV and movies online, 23% have connected their TV to their computer.

The lines between TV and online video are blurring, especially in the eyes of the younger generation.  Broadband is now in nearly two-thirds of all homes and 90% of all homes will have a flat panel TV by 2012.  With the infrastructure in place, the merging of platforms will happen quickly.  This opens the door for the proliferation of interactivity and user generated video content to flood the web.  The amount of content choices available to consumers will grow exponentially.

There is another less known but equally important technological development that will give consumers more choice, and more challenges for marketers.  The growth of remote video storage will have far reaching effects by increasing the ability to serve video on demand.  Companies like Netflix and On Demand are quickly adding content to their libraries to offer streaming on demand video to consumers.  Much like iTunes did in the music business it will take a chunk out of the DVD business.  I never really understood the desire to “own” a movie or TV series on a DVD, but the need may evaporate when you can get it on demand for a few dollars with a mouse click.

The other application enabled by remote video storage is network DVR service currently being offered by Cablevision.  This would enable any viewer to use the basic time shifting and commercial skipping power of the DVR without having the box in home.  The DVR services would be remote and handled in a central storage facility.  Currently DVR penetration is 28% in the US and it could grow dramatically with the roll out of network DVR service.

These trends are all crushing blows to the traditional revenue streams of the content providers.  DVD sales are very important to the movie studios and television lives on the traditional commercial.  Technology will enable to consumers to have limitless choices and the ability to skip by commercials.  On the flip side, video content providers now have the opportunity to put their material online and give marketers an actual measurable marketing venue.  The big question- will they fight the reality of the future like the music and newspaper business or will they embrace it?

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