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Three New Realities of Digital Video

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According to Nielsen, growth in TV watching is flat, while online video viewing is up 42% in just the past year. Television has been trying its best to avoid the same fate that the newspapers and music industries have suffered at the hands of online content, but the interactivity of online programming continues to gain ground.

Television’s new kissing cousin, digital video, serves our favorite programs on a technological silver platter. By way of premium cable, streaming services and connected TV units, our choice of comedy, sports, music, drama, reality programs and soap operas are plated up not only on our television sets, but also our laptops, mobile devices and wireless tablets.

But even with technology changing everything, 85% of all viewership is live television, and seeing a favorite show live on network television is the final frontier of broadcast advertising. That being said, a new generation is arriving on the scene whose behavior is changing as fast as the streaming video they watch.

As we’ve learned from past game changing technologies, sudden shifts in behavior must be faced and accepted before smart strategies can be created. With that in mind, we’ve narrowed down three undeniable new truths to add to a longer list of bi-products of the digital age. The new normal for digital video is anything but, however embracing change always beats the alternative.

#1 Traditional television has gone digital.

Sure, internet videos have attempted to get attention on television, but now we’ve finally arrived at a point in history where traditional shows are moving online. Two cancelled popular soap operas, All My Children and One Life to Live, are now being produced exclusively to watch for free on Hulu. And beyond soap operas are other serial shows that are breaking new ground. Netflix famously brought back Arrested Development, a highly praised but lowly rated show that was cancelled in 2006. The launch of the internet-only version this year included all 12 episodes with no commercial breaks, thus creating an entirely new audience for the original series.

#2 The new viewer is spoiled rotten.

The old ways are no longer acceptable for today’s television viewer. Even basic cable consumers have choices they’ve never had before. On the forefront of major networks is CBS Interactive which offers on-demand online versions of nearly all of their top shows so viewers can watch at their leisure on laptops or through internet TV connectors like Roku, Google TV, TiVo, Samsung Smart TV and others. Hulu has taken up the slack that CBS left for the other networks, offering serial viewing the other major networks – Fox, NBC, ABC, the CW and Univision. This viewing behavior, called “seriality,” allows you to watch a series in order, from start to finish, in one sitting. Also called “binging,” viewers are hooked into not only to the current material, but also past seasons they may want to go back and watch after hearing buzz for years since it first started.

#3 There’s nowhere to go but mobile.

Mobile is on the rise. In fact, it’s doubled as a small screen for digital video in the past year. According to a study at Business Intelligence, in less than one year’s time, video viewing on mobile phones was up by nearly 20 – from 29% to 55% percent from April 2012 to January 2013. A combination of young users, faster 4G networks and the spread of tablets were cited, and the added punch of high capacity phones have actually threatened to knock the iPhone out of the game. So what is to be expected in another year? Forrester predicts that the advertising spend in the year 2016 will reach $5.4 billion, up from $2.4 billion in 2011.

The change in programming marks the birth of an entirely new advertising culture. Though subscription-based services like Netflix don’t yet allow advertising, others are coming up with advertising supported original programming and all are investing heavily in big talent to gear up for the next shift in viewership. AOL recently announced the development of 15 new original programs coming out this fall, and Yahoo produces more than 50 original shows and about with around 300 episodes each month.

It stands to reason that television would be the slowest to enter the Internet age without a fight, but the future of digital video has finally arrived and will no doubt provide endless opportunities for smart marketers.

Brought to you by Vertical Marketing Network, a Leading Integrated Marketing Agency

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10 comments on “Three New Realities of Digital Video

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  5. Noelle
    June 5, 2013

    Traditional TV viewers are starting to embrace digital media since it not only offers a wide range of content, but it’s easier to access than ever before. Content providers have stripped away the need to be tech-savvy; the most difficult step toward accessing digital video is simply remembering your password.

    This is shaping consumers of all ages to expect instant gratification and prefer personal over mass media. Those traits are normally associated with millenials, but I’d bet money that younger consumers aren’t the ones excited about “All My Children” finding a home on Hulu.

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  6. Joanne Morin Hilton
    June 5, 2013

    Watching TV the traditional way is still a highlight for me as that is my down time. It forces me not to multi-task, but to be involved in the moment. However, I realize that is not the way of today. My grandchildren were born digital. They demand/require the streamline opportunities available even with a cost attached. They are the audience that have all of the tablets, smart phones, gaming and internet-enabled devices at their disposal to view TV in a way not possible even 5 years ago. As for me, I’m going to prop my feet up and watch TV tonight!

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  7. karen
    June 5, 2013

    I watch about 90% of my TV shows online or on demand after they broadcast. The frustrating thing right now is all of the subscription costs associated with watching. Netflix streaming doesn’t have day after broadcast viewing and doesn’t have all of the movies I want so I have to get the mail service too; Hulu Plus doesn’t have a deal with all of the cable channels so can’t watch some of my favorite shows, HBO and Showtime have great shows but that is another expense.

    I am looking forward to a more streamlined package price to watch everything I am interested in for one price. But that is still off in the distance since everyone negotiates digital distribution rights on a case-by-case basis.

    Like

  8. R B
    June 5, 2013

    This is the best & most interesting trend going on right now & everyone in all areas of life should know the ins and outs of how the digital age is changing our lives day by day. It is changing everything from Money, Privacy, Entertainment, to Marketing. All areas are being affected by this and there is no turning back, scary to think where this will all take us in the next 10 years.

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  9. Irene
    June 5, 2013

    I’ve had friends recently go out and purchase streaming devices such as the Roku simply so they could access content Hulu Plus and Netflix are offering- this exclusive content seems like a great next step for digital video. Not only that, but running “cancelled” programs that are no longer broadcasted on air on platforms such as Hulu is surely to please fans of those shows who got the boot from prime time.

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  10. Philip
    June 5, 2013

    Excellent blog post. Television content is in the process of adapting to the wants and needs of digital consumers.The relationships that TV viewers have long had with their universal remotes will be transforming to include an enhanced relationship with content delivered on mobile devices, as well as web-connected home entertainment systems.
    Phil

    Like

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This entry was posted on June 5, 2013 by in Uncategorized and tagged , , , , , .

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