Does the Web Complement or Compete with TV?

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The question of whether time spent surfing the Internet
comes at the expense of television viewing is an especially ironic one, considering the
debate that raged 50 years ago over how TV might impact radio listenership and attendance
at movies.

It turns out that TV, radio and cinema were able to coexist
just fine.

But some insisted that the competition between the Net and
TV for America's eyes and ears is significantly different. For one thing, both the Web and
TV are increasingly serving consumers on the same turf: inside the home. Whereas radio
became more of a drive-time diversion for cars, and movies were -- until the video age --
strictly outside-the-home turf, the Net beckons to a generation that's moving personal
computers into family rooms.

While TV is mostly a passive activity (hyperactive remote
or not) and Net surfing is strictly interactive, it's still a matter of staring at a
screen, so it makes sense to presume that one would need to come at the expense of the

Yet so far, data measuring the issue are spectacularly
inconclusive, not to mention perhaps premature. Early indications, however, are that cable
networks have little to fear, since it looks as if young, computer-literate consumers who
have online accounts tend to expand their media time to devote attention to both TV and
the Internet. The time sacrifice may involve their family and personal lives instead.

An MTV Networks media/leisure time study in June, of some
4,000 Americans aged four and above (primarily kids and teens), found that people are
using more of everything during their off-hours, and that new media complements, rather
than replaces, traditional choices like TV, radio and books.

"What we learned is that people don't seem to be
making one-for-one trade-offs at all," said Betsy Frank, executive vice president of
research and development for MTVN, who directed the study from Audits & Surveys
Worldwide. "We know that conventional wisdom holds that the PC is taking time away
from TV, particularly as it becomes a home-based option, but that's not what we

Instead, Frank stressed, the study illustrated that media
consumption led to more media consumption.

"Heavy usage of one medium tends to beget heavy usage
of another," Frank said. "Part of the reason for that seems to be that people
are using the media differently. They're starting to go online and watch TV at the same
time, for example. There's a real synergistic aspect to this."

Indeed, as Frank pointed out, those in the MTVN study kept
diaries of their media use, and the heavy Web users watched more cable TV and read more
books that other respondents.

"The computer may actually be promoting
literacy," Frank concluded. "The patterns in the way that consumers are
interacting with these new choices are changing the traditional playing field. And some
kids seem able to do a lot of consuming at once."

Speaking as a parent, talk like that tends to worry Larry
Gerbrandt, a senior analyst at Paul Kagan Associates Inc. in Carmel, Calif. If kids are
tuned to both the Internet and their TV sets simultaneously, Gerbrandt argued, then
"might they only be paying half-attention to the commercial on TV? Or less than half?
I mean, my son claimed that he could do his homework and watch MTV: Music Television at
the same time, but he didn't wind up at Harvard."

But, Gerbrandt added, if the cable environment is being at
all cannibalized by Internet usage, in many ways, the networks have only themselves to
blame, due to their extensive usage of companion Web sites to bolster their brands and to
drive viewership.

"To the extent that ratings are hurt by this
interactivity, it diminishes the [TV] medium's utility to draw viewers," Gerbrandt
stressed. "It's not necessarily cannibalistic or an either/or proposition. But the
Internet is clearly one more distraction for the viewer. And it presents a huge challenge
to Nielsen [Media Research] in tracking how people are using the mediums."


Nielsen is beginning to address that conundrum with its
announcement in October of plans to install its "PeopleMeter" audience-tracking
devices on the Internet. It will use Web-tracking firm NetRatings Inc. to measure
advertising activity, including banner viewing and clicking, with demographic breakdowns,
as well as e-commerce activity.

What Nielsen will find, if a March survey commissioned by
Showtime Networks Inc.'s new-media group proves accurate, is that some 10 million
households nationwide are watching TV while concurrently surfing the Web. The study --
conducted among 1,717 U.S. TV homes by ICR Research Group -- underscored an acceleration
in convergence between the two media, with some 40 percent of the roughly 25 million
households with Internet access admitting to splitting simultaneous attention between TV
sets and the Web.

Of course, that number has likely increased significantly
since the survey was conducted, said Jeff Morris, SNI's senior vice president of new media
and technology development. But Morris admitted that the definitive study of the issue has
yet to be done.

"We're all still waiting for more comprehensive and
conclusive research regarding the direct cause and effect with online consumption and
other media," Morris said. "We just don't really know how the Web and the TV
fully interact. We've got a lot of tantalizing tidbits to work from, but there's
contradictory data, too."

For instance, Morris said, it's unclear from Showtime's and
other surveys whether regular Web surfers might simply be less involved TV viewers to
begin with, which would squelch any notion of the Internet slicing into consumers' TV

"So, it's possible -- maybe even probable -- that
heavy online users have lower levels of TV consumption," Morris added, "but they
might be online in the first place because they don't watch a lot of TV."


Then again, it may just be a matter of how one chooses to
interpret the data. A tracking study of TV-viewing levels in homes with Internet access,
measured between fall 1996 and fall 1997, which was conducted by Nielsen for American
Online Inc., concluded that those the households watched 15 percent less TV than those
without Web access. That comes out to roughly eight fewer hours per week.

Yet when Discovery Networks U.S. probed deeper into the
same Nielsen data in a study released in September, it concluded that in fact, there was
no TV-viewership decline in Web-access households, reasoning that while those homes watch
less TV than the average, they watched less before going online, as well.

Discovery found that Internet use caused a dip in teen-age
viewing in those homes, but there was a corresponding increase by nonadolescents in the

In other words, with teen-agers online, the TV set was
suddenly available to adults and kids who were previously at the programming mercy of the
teen, forging a demographic shift, but not an overall dive, in TV consumption.


Steve McGowan, vice president of research for Discovery
Networks, charged that the AOL survey was compromised because the online giant failed to
factor in the idea that upscale homes like those possessing computers were less likely to
spend their leisure time in front of the TV to begin with.

"We wanted to find out for ourselves if online use
really does cannibalize TV," McGowan said, "because if it did, we'd have to
re-evaluate our strategy. It's not a matter of whether we'd ever get out of the Internet
business. Discovery Channel Online is too valuable a property for us in increasing our
corporate reach."

The Discovery study -- which analyzed Nielsen's sampling
information far differently to draw its conflicting view -- used the same 389-home sample
(rather than random dwellings) to discern their TV-viewing/Internet-access patterns
between fall 1996 and fall 1997. The conclusion: The Internet-ready homes watched 1.8
percent more TV in 1997 than in 1996.

How did McGowan account for that?

"Well, for one thing, so much of Internet use is still
so task-oriented," McGowan replied. "I mean, just because a kid is using the Web
to do his homework, it obviously doesn't mean that he's doing less homework. He still has
to do it. He may just be playing less. And he would use the Internet, maybe, instead of
going to the library.

"It isn't as if people are sitting there wondering,
'Hmmm, do I go online or do I watch TV tonight?' It probably isn't that mutually
exclusive. Then again, maybe it is. We just don't know yet," he added.

Nielsen actually found common ground with Discovery's
conclusions in a November study that, like Discovery's, tracked viewing patterns in the
same homes both before and after getting hooked up to the Internet. It found that TV
watching in those homes remained virtually identical post-Web.

McGowan believes that it may all be a moot point, to some
degree, sooner than people think.

"As devices go into the home that make it easier to
use the Web, that's where the convergence will really occur," he said. "You'll
be able to flip a switch and go back-and-forth between the Internet and TV. And if you've
got a TV set sitting next to your PC, it takes so long for the pictures to load that you
can multitask. But I'm sure that in the future, you'll have one device to do both."

To some degree, that day already is here. E! Online, the
popular Web site of E! Entertainment Television, is already working on an
interactive-programming venture with Microsoft Corp. unit WebTV Networks that supplies
WebTV subscribers with an enhanced version of E!'s film-preview series, Coming
, which allows access to movie facts and news in a seamless environment.

"This is the kind of synergy, branding and
value-adding that's possible between TV and the Internet," E! Online president Jeremy
Verba said. "If E! Online were just supplying the same information as the channel, we
would be cannibalizing. But with totally separate content, that just doesn't happen. And
at the same time, it drives awareness of, and interest in, the network."