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March 23, 2008
WHAT'S ON
Television without the TV set
As more people in the US watch TV shows online, the challenge for networks is how to attract advertising dollars
NEW YORK - THE 'stupid computer' is a repeated target of the dim-witted office manager Michael Scott on The Office. But the show itself may be motivating viewers in the United States to put down their remote controls and pick up their laptops.

When the fourth season of The Office, an NBC comedy, had its premiere in September, one in five viewings in the US was on a computer screen instead of a television. The episode attracted a broadcast audience of 9.7 million people, according to Nielsen Media Research. It was also streamed from the Web 2.7 million times in one week, executive producer Greg Daniels said.

The Office is on the leading edge of a sharp shift in entertainment viewing that was thought to be years away: Watching television episodes on a computer screen is now a common activity for millions of consumers.

'It has become a mainstream behaviour in an extraordinarily quick time,' said Mr Alan Wurtzel, head of research for NBC, which is owned by General Electric and Vivendi.

'It isn't just the province of college students or generation Y-ers. It spans all ages.'

A study in October by Nielsen Media Research found that one in four Internet users had streamed full-length television episodes online in the last three months, including 39 per cent of people of ages 18 to 34 and, more surprisingly, 23 per cent of those aged 35 to 54.

'I think what we're seeing right now is a great cultural shift in how this country watches television,' said Mr Seth MacFarlane, the creator of Family Guy, a Fox animated comedy that ranks among the most popular online shows.

'Forty years ago, new technology changed what people watched on TV as it migrated to colour. Now new technology is changing where people watch TV, literally omitting the actual television set.'

Although people are watching their shows, the networks are loath to release data about how many people are watching TV shows online and how often. The reason? Possibly because Internet viewers are worth only a fraction of the advertising dollars of television viewers.

'The four and a half billion we make on broadcast is never going to equate to four and a half billion online,' said Mr Quincy Smith, president of CBS Interactive.

The most popular television shows tend to be the most-viewed online as well. While the doctors and nurses of the hit ABC drama, Grey's Anatomy, look a little pixelated on a computer monitor, episodes of the show have been streamed more than 26 million times on ABC.com in the last six months, adding the equivalent of two full ratings points to each telecast.

Heroes, Ugly Betty, CSI, House and Gossip Girl are among the other online hits, analysts say. Just how many shows are being streamed is unclear because there is no widely recognised version of the Nielsen TV ratings for the Internet yet.

Regardless of the content, the shift is forcing the networks to rethink the long-held axioms of network schedulers and advertisers.

In an address in January to television executives in Las Vegas, Mr Jeff Zucker, chief executive of NBC Universal, noted that NBC.com had measured more than half a billion video streams in just over a year.

'Our challenge with all these ventures is to effectively monetise them so that we do not end up trading analog dollars for digital pennies,' he said, calling it the No. 1 challenge for the industry.

Some people pay for episodes via Apple's iTunes Store and Amazon's Unbox service, but many more appear to be watching streams of free, advertising-supported episodes on websites. In a closely watched effort, NBC Universal and News Corp are about to introduce their joint streaming site called Hulu.

One piece of good news for the networks and advertisers is that viewers are more likely to remember ads on the Internet versions of TV shows, partly because the commercials are less numerous and more demographically aimed online, according to many studies.

For the moment at least, conventional wisdom holds that the television and the Internet will essentially merge in the foreseeable future. Already, the hardiest of online viewers are letting PC screens replace their TVs altogether. Others are merely letting broadband connections supplement their digital video recorders.

New York Times

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