The Rise of Online Television

Web TV

Nowadays, you don’t necessarily have to subscribe to cable television in order to meet all of your entertainment needs; it can be as simple as logging onto your computer to view streaming content.

Some of the biggest names in Internet video such as YouTube, Hulu, Netflix, and even Amazon.com are releasing original television shows. Meanwhile, people can view some of their favourite television shows on websites that provide streaming online video, or can use devices such as Apple TV or Roku to transmit content onto their television.

Web series have had a presence online since the 1990s, but it wasn’t until the mid-2000s when series received substantial recognition. Shows included Red vs. Blue from production company Rooster Teeth and Sam Has 7 Friends by Big Fantastic. However, the proliferation of major internet companies distributing original content is a much more recent phenomenon.

In 2011, subscription streaming service Netflix announced that it would begin acquiring original content for its viewers, starting with the political drama House of Cards starring Kevin Spacey. The company also picked up the cult comedy Arrested Development in 2013, nearly seven years after it was cancelled by the FOX network in 2006. House of Cards was nominated for nine Emmy Awards this year, making it the first time a web-based show was recognized by the National Academy of Television Arts & Sciences (NATAS).

Online bookseller Amazon.com has even thrown its hat into the web television series race. The company has ordered pilot episodes for five series that will be offered through its subscription service, Amazon Prime. Amazon selected two live-action comedies and three children’s shows out of the 14 pilot episodes that subscribers voted for.

Video-sharing site YouTube has also financed video channels featuring higher-quality videos that cater to different interests; Google, which owns YouTube, announced that it would add more than 50 channels to the site’s lineup. That’s in addition to the 100 channels that were introduced in the last few years. The new channels will carry advertising, so viewers can watch them for free, and content will come from producers and companies with major media experience. For example, ESPN has a sports channel, Grantland; celebrities Sarah Silverman and Michael Cera have a comedy channel called Jash.

Google is investing $200 million to market the shows to viewers. It is also investing an additional, undisclosed amount to pay for production equipment and even pay the full production costs for some shows.

While these websites do not have a ratings system such as Nielsen, there are promising signs that people are tuning into web series. Internet traffic monitoring firm, Procera Networks reported that that 11 percent of Netflix subscribers watched at least one episode of House of Cards. Procera also reported that 36 percent of devices connected to Netflix via one unspecified DSL network watched at least part of one episode of Arrested Development.

Over at YouTube, the company reports the top 25 original channels average more than a million views a week. In the year since original channels were introduced to the site, the hours that people spend watching YouTube each month increased to four billion from three billion.

Unlike earlier attempts at Internet television, these shows look more like the shows you see on traditional TV. This is due not only to advances in technology, but to companies willing to invest in quality television shows. For example, each of the Amazon comedy pilots cost about $1 million according to those involved in their production. A broadcast comedy pilot can cost up to $2 million in comparison. This is a drop in the bucket for many of these companies, considering Netflix reported revenues of $1 billion in the first quarter of 2013.

Not only can viewers access original programming online, but many traditional television shows can be watched via streaming online video. This has had a profound impact on cable and satellite companies over the last few years as these subscriptions have been declining in record numbers. According to a report from Screen Digest, U.S. cable television subscriptions declined to 56.7 million in 2012, down 3 percent from 58.4 million in 2011. However, the same report shows total revenue generating units (RGUs) for all U.S. cable services rose to 132.4 million, up 2 percent from 130.2 million in 2011. In other words, while consumers may be unplugging their coaxial or fibre optic cable, many still pay for internet service provided by cable companies.

The Associated Press (AP) reports that eight of the nine largest subscription-TV providers in the U.S. lost 195,700 subscribers in the April-to-June quarter. Forbes Magazine reports that in the 12 months ending March 31, 2013, the number of Time Warner residential video subscribers fell by 557,000, or about 4.5 percent. Charter Cable’s numbers fell by 199,000, or 4.8 percent. Comcast lost 359,000 video subscribers in that period for a 1.6 percent decline. Satellite company Dish Network lost 135,000 subscribers in the same time period.

Partially blamed on a weak economy and competition from Internet Protocol Television services such as AT&T U-verse or Verizon FiOS, the number of cancelled subscriptions from consumers can also be seen as an effect of people watching content online instead.

But even with these challenges, don’t expect consumers to throw their televisions away just yet. Advertisers who pay for many of these shows are reluctant to completely invest in online commercials when 30-second spots on television are still considered the standard. According to eMarketer, even though advertisers have increased their spending on digital video ads by 46.5 percent to $2.9 billion this year, that is just a fraction of the $64.5 billion they will spend on television ads.

Additionally, older viewers, who have been accustomed to watching their favourite shows on a television, are not as eager to watch online television shows. As a result, sites such as YouTube focus on content that caters to younger people who have grown up using the internet and are more accustomed to online videos.

Of course, there is also the issue of online piracy. In spite of the efforts of these sites attempting to prevent unauthorized content from being released, it’s still an ongoing battle between these companies and hackers.

The threat of losing subscribers to Internet services has been a concern in the industry for years. The question is, will viewers expect more restrictions on online video, as TV companies and Hollywood studios try to ensure that they are paid for what they produce? Companies such as News Corp.’s Fox broadcasting network is delaying reruns of their programming on Hulu by a week unless the viewer pays a $8-a-month subscription for Hulu Plus or subscribes to Dish’s satellite TV service. It is a possibility that other subscription-TV providers may adopt similar policies in the future.

In spite of these issues, viewing original web series and television programs online is here to stay. Just in the last decade alone, how people are able to view their favourite shows has changed in ways unimaginable years ago. Many questions on how this will impact viewing habits remain. How will cable companies and the television industry handle these changes? Is this a profitable venture for companies to invest in? How will shows on Amazon, Netflix, and YouTube compete with programming on broadcast and cable networks? How will people find the time to watch all these shows? Only time will tell.

December 14, 2017, 11:21 PM EST

Critical Thinking

It’s something all of us could do without in our lives. Unfortunately, this crippling beast decides to rear its ugly head when and how it chooses. There is no individual, society, or country immune to its devastating presence. Neither are organizations, most of which have or most likely will have, to stare this beast in the face. Its name is ‘Crisis’ from the Greek word ‘Krisis’, meaning ‘decisive moment.’