More cable networks are seeing the value of online content distribution as broadband penetration surpasses 35 million homes, according to a new study from Broadband Directions LLC.
“As this new report makes abundantly clear, the largest cable-TV networks have now realized that delivering video over broadband Internet connections is a critical new promotional and incremental revenue-generating activity,” Broadband Directions president Will Richmond said in a statement. “With in excess of 35 million homes in the U.S now connected to the internet via broadband (with continued strong growth expected), and consumers increasingly favoring online as the medium of choice to both discover and consume the products they desire, there is little doubt that broadband delivery is poised to become the next important video distribution platform.”
“Broadband-delivered video represents a fundamental paradigm change for cable TV networks,” he continued. “For the first time in history, cable TV networks, and indeed all video content producers and aggregators have the technical ability to deliver high-quality video directly to their intended audiences, without a business relationship involving a third-party distributor.
“As new technologies make broadband an important pathway to the television set, as well as a conduit for richer home-wide and mobile-based digital media consumption, broadband will continue to reshape the video-distribution value chain as we know it today.”
Among his findings:
- 91% (68 of the top 75) basic cable TV networks now offer video from their web sites to broadband-connected users, including all those in the top 40.
- Of the 68 that offer video, 53% (36) do so primarily to promote the programs they offer on TV, while 47% (32) do so primarily to generate incremental revenue.
- Of the 36 that offer video primarily to promote their programs, only 11% (4) offer video clips specifically tied to the episodes airing that particular week, while 89% (32) offer video clips that are either outtakes from previous episodes, ancillary content (such as interviews with actors) or stock promotional trailers.
- Of the 32 that offer video primarily to generate incremental revenue, 81% (26) rely on advertising (typically 15- or 30-second “pre-roll” video ads), 13% (4) offer subscriptions, and 6% (2) do so to support electronic commerce.