Wednesday, January 21, 2009

Online TV Sites Battle for Viewers

On TV, content is king. But on the Web, community may reign supreme. Throughout television history, the way to lure most viewers was to air the best shows. It doesn't necessarily work that way on the Web, where many shows can be seen on multiple sites.

Take the recent announcement by CBS (CBS) that it would begin airing shows like Showtime's Dexter and Sony Pictures Television's (SNE) Bewitched on, CBS's online site for full-length video. But none of the more than 1,000 new programs are exclusive to And the episodes of Bewitched, the classic sit-com featuring the nose-wrinkling witch Samantha, are already on rival Hulu, the joint site of NBC Universal and News Corp. (NWS). "Every major studio right now is following a nonexclusive strategy" online, says Arash Amel, senior analyst with London-based media researcher Screen Digest. "The question for these sites is beginning to be, 'how do you differentiate yourself beyond the content you have?' "

The answer for and others is to encourage users to form a community. Host sites including, Joost, (SATS), Veoh, Fancast (CMCSA), and Hulu are letting users post reviews, build profile pages, form fan groups, vote in interactive polls, and share activity logs with friends.

boosting advertising value

Like newspapers and other media outlets hoping social networking elements will foster loyalty among users, TV sites want to find ways to keep viewers on the site longer and get them to recruit friends. It's too early to tell what impact the new features will have on the bottom line, but the aim is to entice more content producers to put programming on their sites—and to boost the value to advertisers.

Building online communities for video sites has been tried before. The standard-bearer for online video, Google-owned YouTube (GOOG), came into prominence partly because of its focus on community. Its multitudes of short, often whimsical clips uploaded by users are well suited for commenting, rating, and sharing with friends. But YouTube's lack of professionally produced content has also deterred advertisers.

With the market for online video advertising set to grow to $850 million in 2009, from $587 million last year, YouTube is expected to cede some its share of the market to the growing number of sites with studio-produced content. "The professional sites are one of the main drivers for that 45% growth this year," says David Hallerman, a senior analyst at researcher eMarketer.

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