Two freshly released viewer surveys underscore the fragmentation of the TV marketplace, the surging demand for online video and time shifting, and the changing consumer attitudes toward traditional, live television.

The most recent Morpace Omnibus study reveals that while 52 percent of viewing is live (linear broadcasting, whether prerecorded such as a TV series or movies, or actual live programming like sports and news), more than a third (36 percent) of viewing is now on-demand. In addition to VOD services, 41 percent of consumers use in-home or network DVRs for additional “on-demand,” non-linear viewing.

Meanwhile, the migration online continues, with results from an Altman Vilandria & Co. survey declaring that broadcast TV consumption on the Internet doubled over the past year.

Morpace Omnibus Report: August 2010

The list of competitors jousting to disintermediate cable’s long-held and lucrative grasp over television viewing is lengthy but muddled. This proverbial ”kitchen sink” of attackers includes “connected TVs” (Sony Bravia, utilizing Google TV software), Internet-connected gaming consoles (Playstation 3, XBox 360), streaming video services (Hulu, Netflix), and over-the-top (OTT) set-top boxes (Apple TV, Roku).

However, no single platform or technology has conquered this potentially prolific space. There is no “killer app”… at least not yet.

Increased online and time-shifted viewing is yet to dramatically cut the cord on cable TV providers, with only 3 percent of 18- to 34-year-olds sampled by Altman actually canceling their cable. Couple that with 96 percent of Morpace’s respondents answering that they still watching at least some programming from a traditional device, and TV’s place begins to look more secure.

But dramatic shifts in viewing behavior appear to bubble just beneath the surface. Altman found that while only 3 percent of the 18-34 group have “cut the cord,” another 25 percent have “seriously considered” dropping pay TV altogether.  This is just the latest jolt to the cable industry, which lost 711,000 customers in Q2 2010 alone.

The upshot of all this data: A cavalry of competitors are storming the gates, but local and national broadcasters still have opportunities to differentiate their assets through mobile (the Washington Consumer Showcase of Mobile DTV, which we have documented), 3-D and other innovations.

Even with the OTT space cluttered and disjoint, local broadcasters can begin fostering partnerships that enable them to package their content across devices and locations while unlocking diverse, non-linear revenues. Plus, OTA programming has this ace in the hole — it’s free. The net effect can be additive for local broadcasters, not subtractive or substitutive.

Tags: DVR, online video, OTT, timeshifting

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