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TV distribution being changed by Internet

By Stephen Torrence

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Published: Thursday, November 20, 2008

Updated: Sunday, August 30, 2009

This morning began much like any other for me. I woke up, rubbed the remnants of sleep from my face, and sat down to eat some breakfast while watching last night's The Daily Show on my laptop.

Yes, on my laptop.

No, I didn't pirate the show from some clandestine Usenet server or circumvent the University's network filters to grab it via Bittorrent. Nor did I watch it on a TiVo or another digital video recorder. I watched it online. Legally. For free.

Since March of this year, Hulu.com has been offering an ever-growing database of free television and movie content from major studios. They've made deals with Universal, Fox, MGM, Sony and many others to stream videos live from their Web site with minimal advertising interruption.

Hulu is part of a growing trend among major networks and studios to release their content to the public online for us to view any time, for free, shortly after the content airs.

I use Hulu so much now that I haven't watched a live show on our cable TV for more than a month. The convenience of being able to consume content on my terms, when I choose, where I choose, is empowering.

Since the onset of DVRs a few years ago, the American public has gotten more and more used to watching television in this on-demand style. Studios initially were peeved that consumers could skip commercials, so they placed obtrusive ads within the shows themselves, but these were usually tolerable.

Now they're facilitating another revolution in television by offering their content online. With Hulu, the content even extends beyond recent series. For instance, they offer the complete original "Lost in Space," "Saturday Night Live" clips going back to the '70s, and feature-length movies such as "The Fifth Element."

Most Hulu videos longer than five minutes have short advertisement breaks. Yet unlike television, these consist of a single 30-second commercial during each break. It's easy to mute them and hit up another Web site while they run.

Apple has joined the online, on-demand content distribution game with its myriad show and movie offerings on the iTunes Store. For a few dollars per video, consumers can download high-quality, commercial-free content and play it on their computer, iPod or Apple TV.

Netflix also now offers subscribers the ability to stream movies from their Web site. But with more content becoming available for free all the time, it remains to be seen how long paid services such as iTunes and Netflix will persist.

During the recent 2008 Beijing Olympics, NBC hosted roughly 2,200 hours of streaming coverage from the Games on their Web site. This "narrowcasting" allowed fans to watch sports such as archery or karate that they might not see otherwise.

Despite these advances, online content distribution is still a fledgling industry. The vast majority of Americans endure the long commercial breaks to watch shows live, while a small percentage use DVRs. By most estimates online viewing accounts for less than 0.1 percent of the total.

Nevertheless, we're seeing the studios make a genuine attempt to fuse the old broadcast model with the YouTube paradigm. Viewing percentages might be low now, but once the word gets out and the services mature, adoption will grow significantly.

As we move closer to a more on-demand media world, the conventions of TV distribution, advertising and consumption are yielding to new models. The next time you miss "House" or "The Colbert Report," look them up on Hulu. You'll get a taste of the future, and you just might realize that you prefer it.

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