Is Television Dead?

Not everything is going the way of the computer. For a while, it seemed that the computer -– already siphoning print audiences -- was on its way toward total media domination. But new data from Bain & Co. tells us the opposite.

Reuters reports that time spent watching television will rise faster than leisure time spent on the Web through 2012, while a major audience for Internet video could take even longer to develop.

According to data exclusively released by Bain at the Reuters Media Summit in New York, U.S. viewers on average will spend nearly two more hours per week watching television by 2012, fueled by growth in video-on-demand choices and the use of digital video recorders.

In that same time frame, Internet use outside of the office is expected to rise by less than half an hour per week.

The data could be sobering to TV networks and Web media companies, which are investing heavily in Internet video sites and testing ways to make money off them through advertising.

David Sanderson, head of Bain's global media practice, said the prospect for Internet video to become a viable alternative to the broadcast, cable or satellite signals into viewer's homes could take five years or more to materialize.

"There are capacity constraints, the technology isn't quite there ... and frankly the business models for the content owners, all of that still needs to be worked out," Sanderson said at the Summit.
"Until that's worked out and until the Internet can deliver that same experience, then it's still going to be delivered over the traditional multichannel video providers," he said.

But, businesses have already made inroads into web video. Hulu.com, a joint venture controlled by NBC Universal and the Fox TV business of the News Corporation, has started showing television series like ''The Office,'' ''Prison Break'' and ''24'' this fall to online viewers in the United States.

Other Internet video services, including Joost, Blinkx and Babelgum, have started or are planning televisionlike offerings from a variety of sources. YouTube, the Google-owned company that popularized home movie clips, has been adding video material from established television providers, even as it tries to fend off allegations of copyright infringement from Viacom.

But as with many media offerings on the Web, turning audiences into earnings is difficult. Internet users have come to expect online media to be free, so trying to charge for Web videos is probably futile, with the exception of live sports or high-profile movies. Instead, the predominant revenue producer for Web video will probably be advertising. But this could be a problem if the economy heads into a recession and businesses choke off ad money.