81 Million People in US Watch Broadband Video

Little Impact on Traditional Television Viewing From Broadband Video Use

Alexandria, VA and New York, NY — An estimated 81 million people, or 63% of the 129 million people who access the Internet over broadband in the U.S., watch broadband video at home or at work, according to new research conducted by The Nielsen Company for The Cable & Telecommunications Association for Marketing (CTAM). This number increased from 70 million in September 2006 to 81 million in March 2007, a jump of 16% in just six months.

The analysis also showed that traditional home television ratings are minimally, if at all, affected by broadband video viewing over the Internet, because broadband viewing was found largely to be incremental new viewing rather than a substitute for traditional television viewing.

The multi-phased study – A Barometer of Broadband Content and Its Users – provides the first comprehensive look at the relationship of broadband video consumption at home and at work to traditional television viewing behavior. It also presents a detailed analysis of specific television network viewing preferences among broadband video users across all key demographics.

Commissioned by CTAM and conducted by Nielsen Entertainment and NielsenConnect, the multi-faceted research effort integrates analysis from across The Nielsen Company. Findings were derived through online research based on the Nielsen//NetRatings MegaPanel and NetViews services, extensive interviews conducted in the Nielsen Entertainment digital lab, and a “fusion” of the quantitative online survey data with television viewing data from Nielsen Media Research’s National People Meter sample.

“Nielsen was delighted to work with CTAM on this report, which reflects the value we can create by integrating data and analysis from across our company,” said Susan Whiting, Executive Vice President, The Nielsen Company and Chairman, Nielsen Media Research. “This approach allows us to deliver new insight into our clients’ customers and markets.”

Key findings from the report include:

• Online Video Usage Supplements Traditional Television Viewing Overall: Online video (including broadband video at work and in the home) was shown to add to overall video viewing more frequently than it replaced traditional television viewing in the home, representing a net audience gain to total television viewing. Thirty-three percent of those surveyed indicated that watching video over broadband Internet increased their television viewing time, vs. 13 percent who indicated it decreased their traditional television viewing.
• Potential Upside for Increased Television Program Viewing Online is High Among Current Broadband Video Users: An additional thirty-two million lighter broadband video users report being open to more TV programs via the Internet. Further, consumers indicate that greater awareness of where to find the videos they’re seeking, better navigation interfaces, and the increased availability of more high-profile television programs online could significantly drive future broadband video content use over the long-term.
• TV Set Access is the Tipping Point for Widespread Broadband Video Use: Based on respondent feedback, widespread consumer use of broadband video seems to be contingent on Internet platform video content becoming more easily accessible via home television sets. At that point, consumers say, Internet video fare could assume its place as another source for content on demand.
• Broadband Video Use is Dominated by the Top Brands: ABC.com was the leader across all broadband viewer visits to television network Web sites, while Yahoo! Movies was the leader in the movies category.

“The growing popularity of broadband video programming makes it vital to better understand its true impact on the viewership of and engagement with television,” said CTAM President and CEO Char Beales. “This research provides an unprecedented look at how consumers are making television viewing decisions as well as which consumers are more likely to embrace broadband content in the future.”

“Linking television viewing data with Internet usage behavior goes far beyond what traditional survey-based research methods can offer to help content providers best manage the growth of television and broadband video platforms,” said Paul Donato, Chief Research Officer of The Nielsen Company. “The fusion of these discrete Nielsen data sets into a single, unified analysis provides the most complete benchmark of broadband content viewing behavior to date.”

“There have been major changes over the last 30 years in how television is consumed-the remote control, portable TV, time shifting DVRs-but one of the most dramatic promises to be television via the Internet,” said Tim Brooks, Research Committee liaison to the CTAM Board of Directors and Executive Vice President, Research, Lifetime Television. “This new study helps us understand the impact of this radically new method of distribution both as it is now, in its infancy, and how it is likely to unfold over the next few years.”

Scope and Methodology

This television industry study is comprised of four distinct phases that integrated research assets from across The Nielsen Company, as coordinated by Nielsen Entertainment and NielsenConnect. They include:

• Penetration Analysis: Internet usage data from Nielsen//NetRatings identified the broadband video user universe by Heavy, Moderate and Light usage levels both at home and at work. These data served as the study’s underlying survey sampling framework, distinguishing it from earlier studies conducted in this arena.
• Live Online Video Digital Lab Sessions. In phase two, eight live Internet-linked group sessions were conducted to explore how different video formats and advertising tactics contribute to the long-term growth of television and broadband video platforms while minimizing and controlling TV audience erosion. Thirty-two consumers participated in these sessions, which were conducted by Nielsen Entertainment Television Group at the CBS TV City facilities in Las Vegas on November 29 and 30, 2006.
• Quantitative Online Segmentation Study. From December 2006 through February 2007, 2,267 online interviews were conducted to gather data on primary online video usage via broadband connections in home and work environments by Heavy, Moderate and Light users as well as non-video users. Broadband behavioral metrics provided by Nielsen//NetRatings were also captured to generate enriched market segment profiles typically not possible in consumer survey research settings.
• Fusion Analysis: Respondent level survey results were linked to National People Meter (NPM) television viewing data for January and April 2007, using identical household metrics in the segmentation study as those employed to capture NPM data by Nielsen Media Research. This created a comprehensive benchmark of the programming preferences that characterize the six broadband video user segments.

A Barometer of Broadband Content and Its Users is available on the CTAM Web site at http://www.ctam.com/research/form-06-broadband-email.pdf.