In Depth

Web Video Boom Will Outlive Writers Strike, Experts Say

Even if the writers strike ends soon, the genie isn’t going back into the bottle when it comes to Web video.

With an agreement looking likely to come soon in the three-month writers strike, online video experts aren’t worried that viewers who have been turning to the Internet for their entertainment fix in the last 90 days will suddenly tune out.

“The strike opened many people’s eyes to the wide range of video available on the Internet,” said Jim Louderback, CEO of Internet TV network Revision3. “It’s also going to take [television] a while to ramp back up to full production, which means even more people will find how good online video is.”

Consumer behavior already has begun to shift to the Web. Solutions Research Group recently found that in November, about 20% of Internet users watched a TV show online each week.

A Choicestream survey from late last year found that of consumers who watch TV on their computer, one-third watch at least four hours per week. Also, 20% of Internet consumers expect to be watching more TV on alternative devices this year and more than half of those will do so at the expense of watching TV on their TV sets, the study found.

“Just how much ‘American Gladiators’ can one person take?” asked T.S. Kelly, senior VP and director of research and insight for Havas Digital. “Every day the strike continues is another day that benefits not just online video, but every other alternative video source out there, including exploring further down the digital cable dial to watch obscure fare like the Welding Channel, but also downloads, VOD, streaming, Netflix, etc. Though I wouldn't say there has been a mad rush to online video, consumers are clearly looking for other options just as they did in 1988.”

While the strike has been devastating for many in the creative community, it’s also afforded the opportunity for creators to see the benefits of distributing video online, said Keith Richman, CEO of video site Break.com.

“The disruption caused to the historical television creative cycle will likely be permanent and will lead to additional ad dollars shifting from television to the Internet,” Mr. Richman said. Break landed a few six-figure ad deals recently that were moved away from television specifically because of the strike, he said.

But consumers still will go back to the TV set in the living room, said Kaan Yigit, analyst with Solutions Research Group. The pent-up demand for TV will boost ratings when shows return, especially since 72% of the population watches regular TV daily, he said.

The migration of ad dollars to the Web will continue, however. “The shift of ad dollars to the Internet is bigger than the writers strike issue,” Mr. Yigit said.

(Editor: Baumann. Updated first paragraph at 1:30 p.m.)