According to Web consultancy Bain & Co, developing a major web audience for Internet video could be a lot longer away than expected.
The firm says by 2012, people watching TV in the U.S. will increase their viewing by two hours a week, while during that same time period those using the Internet outside the office will increase their usage by only a half-hour a week.
David Sanderson, head of Bain's global media practice, concluded, "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.
"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."
Sanderson adds he thinks it could take five years or more for video to become a viable video alternative online.
I'm not sure about these projections. Advertisers recently were surprised when their spend went so quickly by people viewing the TV shows of the networks online; so there is already a business model working at this time.
As to whether the Internet will ever become a competitor to television really doesn't make sense to me. Devices are already available that can transfer a downloaded or streaming show to the television from the computer, so that issue is only a matter of where you're getting your content from, not where you're watching it at. There needs to be more simplicity built into the devices so the average user can do it with a couple of clicks, but other than that, it's already here.
I think what Bain and Sanderson are talking about is the Internet become an alternative to television. I'm really not sure that's the issue. I think the issue is moving away from linear TV to an Internet a la carte viewing experience, i.e. watching what you want when you want where you want.
Personally, I don't see how improving the existing TV experience in the picture quality or the in-demand choices being offered, will do anything to interfere with the growth of professional video on the Internet.
With the surprisingly large number of consumers visiting websites to view their TV show they've missed or watch them again, I don't see online video taking years to make it.
Now if Bain & Co is talking about video competitors emerging online that directly compete with the networks, that may have some substance to it.
What is going to struggle, as far as online video goes, is the amateur video, which for the most part isn't able to be monetized. The huge costs associated with streaming video online prohibits a business model based upon that type of content.
Google (GOOG) is already finding this out with YouTube, as they're looking for deals to put professional content on the site to make money from through advertising.
I don't see the professional online video market struggling like Bain & Co are saying. Unless there's a huge change in the behavior of people, the Internet is the only medium able to deliver their favorite shows when they want to see them. That in itself guarantees it'll be a fast growing business.
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