Video Content Goes High/Low

Video content for the consumer is going high/low. The high end growth is represented by HDTV and the low end is represented by Internet video.

On the high resolution end, a recent ESPN study indicates the clarity of an HDTV picture on a 50” plasma or LCD screen is promising to re-establish a nation of couch potatoes (CNET store here). After watching a program or sporting event in HD, it’s tough to switch to a channel that is still broadcast with TV’s old resolution standards. Most people I know with HDTV service, surf the HD menu first, the “other” channels next. According to the ESPN study in the CNET story, “Thirty-two percent of respondents said whether a program is in HD influences what they watched.”

That’s a big number and it is sure to get the attention of advertisers. However, as an HD subscriber, I’m still amazed by the number of non-HD commericials I see in HD programming. Grabbing the viewer’s attention for an ad is always a challenge and it is made more difficult—no matter the strength of the concept—when the advertising production qualities related to resolution are substandard to the programming.

By the end of 2006, HDTV households will represent just under 20 percent of all television households in the U.S., but those same households are an important and, on average, a more affluent demographic segment. In addition, the HD households were just under 10 percent of households at the end of 2005. That’s 100 percent growth in a year. Seems like a tipping point to me! Why more advertisers aren’t taking advantage of the excitement related to HD programming in their commercials is perplexing. One caveat: most HDTV subscriptions now come with a DVR that very easily allows subscribers to record HD or standard quality programming. Most of those people who do use their DVR, fast-forward through the commercials, so it demands that advertisers make their commercials all the more compelling.

On the lower resolution end, Internet video is seeing explosive growth. YouTube visitors are now watching 100 million videos per day. That certainly qualifies YouTube as a “network” by old television standards. In addition, more people are accessing the video on news sites or downloading TV programming to watch online. This phenomenal growth of Web video is also fueling a rapid increase in online video advertising (see eMarketer report). Online video advertising will grow 82 percent this year and 89 percent next year according to eMarketer. The chart at right also shows strong growth continuing to 2010.

Bottom line, consumers aren’t looking for more choices or channels; they’re looking for something that is interesting. Sometimes they will find it in a high-definition broadcast of the Rose Bowl game, and sometimes they’ll find it a quixotic, inane YouTube video about the the largest non-nuclear explosions in history. Advertisers follow eyeballs, and all they ask is a chance to present their message in a way that will get them the most return on their marketing investment. Sometimes the best choice will be on regular TV, sometimes on HDTV and sometimes on the Web video. Choose well.