As the line between traditional TV viewing and online viewing of content originally generated for TV blurs, marketers have an opportunity to establish a new revenue stream. Younger consumers, in particular, are most likely to watch TV shows on their computers. In addition, these consumers indicate a willingness to pay for some of this content.
Ipsos OTX MediaCT’s LMX MOTION study shows that Hulu has grown its monthly audience of online digital video viewers from 3% to 20% in the past 2 years. In addition, survey data indicates that over half of younger adults, those between the ages of 18–34, will pay for streaming content in certain situations.
The Ipsos study analyzed consumer attitudes regarding various service providers in the streaming content universe. Currently, both Hulu and iTunes have well established fee-based models based on a per download incident. Netflix, another contender, operates with a monthly subscription fee. All of these offerings are popular with consumers. However, consumers may choose one service over another based on the type of content they plan to watch. For example:
- Consumers, in general, are more ‘involved’ with watching episodes of comedies multiple times.
- Consumers are not highly involved with reality shows.
- Niche shows like Mad Men and acclaimed documentaries can spur consumers to select a fee-based online subscription option.
The survey finds that 17% of 18–34 year olds will pay Hulu $1 per episode to watch a show online and will accept ads. About 15% of consumers in that same age group will pay iTunes $1 per episode without ads. And 19% will pay a $9 monthly online subscription fee to Netflix to access a show they regularly watch without ads.
Brian Cruikshank, EVP at Ipsos OTX MediaCT, believes that the fee-based online TV market is growing, based on sheer demographics alone. Cruikshank also points out that no dominant player currently exists in this market. However, as the audience grows, competition and marketing will likely increase.[Source: One Out of Two US 18–34 Year Olds is Interested in a Fee-Based Online TV Viewing Option. Ipsos-na.com. 29 Nov. 2010. Web. 18 Jan. 2011]