Online sites vie for video viewers

By Andy Goldberg Mar 29, 2011, 2:42 GMT

San Francisco - Google is courting Hollywood's A-listers to lend their names to channels on its YouTube video site, it was reported Monday.

The move raises the possibility of stars curating videos devoted to their pet interests: Mel Gibson could showcase world-class anger fits, and Lindsay Lohan could select snippets from famous jewel heist movies, while Charlie Sheen might have to go to an X-rated site to portray his favourite work.

Google's idea, as reported by the Financial Times, is to offer the as-yet unnamed stars a cash advance against a share of the increased advertising revenues their sponsorship would bring.

The proposal is one of several initiatives rolling out across the web that underscore just how far the internet has advanced in challenging television as the viewing media of choice for modern consumers.

For instance, Facebook and Warner Bros on Monday announced the expansion of their fledgling video rental deal, which started earlier this month with the release of the Batman film The Dark Knight. Now, the Hollywood giant is releasing five more movies to Facebook customers, including Harry Potter and the Sorcerer's Stone, Harry Potter and the Chamber of Secrets, Inception, Life as We Know It and Yogi Bear.

Meanwhile, Video rental leader Netflix is aggressively expanding its online video offerings. The company built its success and buried old-school rental chains like Blockbuster by allowing people to choose their videos online and sending them DVDs through the mail.

Now, Netflix is rapidly increasing its online video offerings and recently inked a 100-million-dollar deal for its first ever mini- series, House of Cards, featuring Kevin Spacey.

Retail giant Amazon is getting into the online video business, offering free streaming movies and TV shows to its Prime members. Redbox, which operates 30,000 automated supermarket kiosks renting movies for 1 dollar a day, announced its own plans to enter the streaming world.

While the television industry insists there is no evidence of cord-cutting - people giving up their cable connections to watch TV shows and movies purely over broadband internet - it's clear that all these online video initiatives are dramatically changing viewing habits.

A study last summer by the Pew Research Project found that more than 50 per cent of adult viewers in the US watched comedy videos online, while the number of adults watching movies or TV shows online doubled from 16 to 32 per cent.

A separate study by Magid Associates found that 13 per cent of all internet users watch online videos at least once a day. Another study by Knowledge Networks found that 35 per cent of Americans said they streamed network TV shows.

The trends were largely driven by 18-29 year olds, and among younger teenagers - the Facebook generation, who have grown up in a wi-fi, broadband world - the numbers are thought to be far higher.

Their motto could be 'We watch what we want, when we want, how we want,' which means that this very minute they're watching the season finale of Jersey Shore on their laptops even as they're tweeting, facebooking, facetiming, homeworking, sulking and doing their nails all at the same time.

It's not just teenagers who are customizing their viewing habits online, and don't mind the targeted personalized advertising that can make ads far more effective on the internet than on the impersonal TV.

'Online viewing is growing apace, with little indication of increased frustration with the advertising load,' notes David Tice of Knowledge Networks. 'Consumers continue to accept some level of advertising as an appropriate quid pro quo, boding well for the continuation of ad-supported online models - where the content has clear value and appeal.'

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