Freakonomics: Is Over-The-Top Video Hurting TV?
If you’re familiar with Freakonomics (and the Freakonomics blog at NYTimes.com), you know their “hook”: using statistics to upset the common wisdom apple-cart, from tying reduction in crime rates to the increase in abortion rates to in-depth studies of baby-naming patterns.
In a post of interest to emerging IPTV providers, the Freakonomics blog takes a look at the impact of Internet video on “TV” — which of course these days means MSO- or carrier-provided programming for the most part.
The assumption being examined: if Web music seemingly has crushed the record industry, won’t Web video do the same to the economics of the traditional TV business?
Not surprisingly, they quote a study from a wonky Wharton economist that delivers a different take on the question:
While I find some evidence of substitution of web viewing for conventional television viewing, time spent viewing programming on the web — 4 hours per week — far exceeds the reduction in weekly traditional television viewing of about 25 minutes. Overall time spent on network-controlled viewing (television plus network websites) increased by 1.5 hours per week….
He goes on to say — and this is fairly-accepted conventional wisdom — that Web sampling or catch-up seems to stimulate traditional viewing.
One wildcard here would seem to be the concept of portability. At least part of the success of MP3s and iPods comes from the fact that they deliver a new and in some cases better user experience — all your music in your pocket.
The advantages of the Internet video experience center on on-demand, long-tail content (often free) but it’s hard to say the Internet video view experience is *better.* The emergenc of mobile video viewing, much like on-the-go-music listening, could change the equation.
The strategy many service providers seem to be at least considering takes a page from the Microsoft playbook of “embrace and extend”: offer some form of over-the-top video via IPTV systems with a focus on driving users from that environment to a richer, high-bandwidth-based IPTV experience. In short, the best of both worlds.
