Longing for More Web Video

Short-form video dominates the Internet today, but when longer content finds a comfortable place online, traditional TV may have cause for concern

by Catherine Holahan

For all the talk of Internet video killing television, broadcast executives haven't seen much reason to fear. To date, the Internet has remained something of a vending machine to television's five-star restaurant. Its main fare—two- to three-minute news bites and user-generated shorts—is about as satisfying as a sugary snack. For real sustenance, Internet users are still turning to television's menu of long-form programming.

In September, Time Warner's (TWX) AOL and the Associated Press released a study of the online viewing habits of more than 3,000 Web surfers. Though more than half watched Web video, most consumed clips that were too short to compete for time with television. In fact, 52% of the respondents who watched online video reported that their Internet viewing habits didn't affect their television viewing, and 32% said they actually watched more TV after being enticed by show clips. Only 15% responded that Internet viewing had reduced their television consumption.

Though TV executives don't have to sweat the Internet immediately, they have cause for concern on the horizon. Over the next couple of years, users are bound to demand longer Internet video as impediments to watching high-quality content online disappear, say industry players. That's going to create more competition for television networks as Internet users have to choose between, say, watching a half-hour network show on air, watching a half-hour independently produced Internet show, or watching on-demand TV shows that normally wouldn't compete for that time slot.

Change Is Coming

Already, some sites are noticing a demand for longer-form Internet video. Lycos launched video and social-networking site Lycos Cinema on Nov. 13. The site, which primarily streams indie movies, captures a typical user's attention for more than 60 minutes, says Chief Operating Officer Brian Kalinowsky. "People are staying online for a long time," he says. "They will sometimes start a movie, watch for five minutes, and then, if they don't like it, turn it off and watch another movie. But they stay on the site."

Suranga Chandratillake, co-founder and chief executive officer of video-search engine Blinkx, also sees demand for longer online content. "I think there is no doubt that it is going to move to longer and longer formats," says Chandratillake. "Most users today are still looking for the short-form user-generated content, but there are three big things that will change that."

The first is the ability to stream high-quality pictures over broadband. Today, downloading lengthy shows generally takes too long for the Internet's I-want-it-now audience, not to mention the valuable hard-drive real estate such shows demand. Streaming content, particularly when the stream is long, often delivers picture or sound quality that's inferior to that on television. When expanded to full-screen view, for example, the content sometimes appears pixilated. Streams can also freeze if the connection isn't high quality or the server delivering the content is under too much strain. This problem is lessening as media companies invest in servers capable of handling more bandwidth and as Internet providers such as Verizon Communications (VZ) get better at delivering broadband content over high-speed connections.

Opening the Door

The second obstacle is getting the content from the small computer screen to the big home theater screens, which have proliferated thanks to low prices (see BusinessWeek.com, 10/4/06, "Big-TV Battle: LCD vs. Plasma"). Watching video for long periods is obviously more pleasurable on a large screen in a living room. However, quality can suffer when connecting a PC and television via a cable.