Digital Video Website Usage, and Mix of Revenue Models, Expanding Rapidly

New York, NY -- It's no secret that online digital video has become mainstream in the U.S. In fact, 67% of online Americans have now streamed or downloaded digital video content ("digital video users" as described here), according to recent data from Ipsos MediaCT's MOTION study. While YouTube continues to dominate the short video clip market and iTunes continues to do brisk business via downloads, the streaming of longer running content, such as TV shows and movies, has become more popular due to sites such as Hulu and Netflix.

The growth of Hulu in particular has been rapid - only 9% of digital video users were aware of Hulu in September 2008; today, its awareness is 41%. iTunes also posted growth for digital video during this time frame, and even YouTube keeps extending its impressive reach. At the same time, the visibility of MySpace as a digital video source has dimmed recently.

"The increase in usage across multiple sites - and business models - confirms that Americans are watching a greater breadth of digital video than ever before," explains Brian Pickens, Senior Research Manager at Ipsos MediaCT. "As a result, TV and movie studios should continue to embrace online video as another avenue to extend their content properties and reach consumers. Studio support of Hulu clearly illustrates that many executives on the content side have already incorporated online digital media into their strategies."

As a result of this growth, advertisers and marketers need to be prepared to reach these key individuals no matter where they choose to consume their video. Therefore, consumer willingness to accept advertising within the online digital video medium is paramount. A positive sign for marketers is that a clear majority of digital video users feel it is reasonable to have advertising embedded in both online full-length TV shows and movies, as long as the content remains free-of-charge. These numbers help to illustrate why streaming sites have rapidly increased in popularity over a short timeframe.

It is important to note that digital video users watch almost 15 hours of TV on their traditional television per week versus only about two hours on their PC. In most cases, digital video users state a strong preference for viewing content on their televisions. With professionally produced content now available through legitimate online websites, consumers may be poised to adopt technology solutions that facilitate the connected living room so often mentioned in the past. There is a desire to combine the readily available online video content and the preferred viewing platform--the television.

Brian Pickens concludes, "Despite the onslaught of video choices online, Americans remain happy with their TVs and HDTVs, especially as TVs grow larger and resolution improves with HDTVs. However, Americans also enjoy the immediate gratification of digital video content accessible online, and creating an easy and affordable way to bridge the gap from online video to the TV would allow consumers to enjoy the best of both worlds."

Data were sourced from the April 2009 wave of Ipsos MediaCT's MOTION study, which was conducted via online interviews among a representative online population aged 12 years and older. To learn more about MOTION, a biannual syndicated study tracking the U.S. online video market, please visit: http://www.ipsosmediact.com/products/motion_overview.aspx.

For more information, please contact: Brian Pickens Senior Research Manager Ipsos MediaCT (612) 573-8520 [email protected]

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