Online may not replace, but will certainly grow in co-existence

Implications: The results of a study by the Convergence Group indicating the impact of online viewing on traditional outlets of television via cable, broadband, IPTV is presented in the article.  But replacement is not the issue.

Analysis: This study offers some new data on viewing behaviors in households comparing watching online versus traditional TV consumption.  The data is interesting, but seems to minimize the growth of online viewing in comparison to other studies that exist, which shows higher levels of online viewing than that found in this study.  There is also some interesting tidbits about the growing impact of the DVR on viewing, and the many utility functions this technology provides households.

To me the title of this article is a bit misleading.  Its not an either-or system, in that consumers must choose between online and traditional TV.  Across all demographics, many studies have found that online viewing is prevalent, but moreso for younger audiences.  Younger viewers (12-34) are not as wrapped up in big screen TVs or HDTV.  They are used to watching online, find it more convenient and flexible, and very natural.  Older demos are the opposite.

The fact is online viewing is growing, as evidenced in this study, and it will continue to grow.  This is why advertisers are shifting more dollars to digital platforms.

Example:  General Motors recently said that over the next three years they will move half of their annual $3 billion ad budget to digital platforms and one-to-one marketing.  One Advertising Age exec commented that "as GM goes, so goes the automotive industry."  Automotive is the largest category of television advertising.  Clearly, they are going after the online audience, at least in part of their strategy.