Is Over-The-Top Driving Long-Form Growth?

I’ve made the assertion that people will always prefer to watch long form video on the 10-foot screen as a human truism that will drive how the market evolves.   But I’ve felt a little pang about being so dogmatic since I don’t have data to support it.   And what about the iPad; might it not become a major outlet for watching movies and TV shows?

So it was interesting for me to find this CNET item from November 2010 citing a comment from Netflix CEO Reed Hastings:  the tablet craze affects us very little:

“People prefer large screens,” Hastings said. “So the impact of Xbox, PS3, the Wii phenomenon–huge impact. The impact of the iPad–it’s a great system, but the Mac laptops outstrip the iPad for Netflix viewing by a huge factor.” Long-form video viewing does not translate that well to mobile platforms, he asserted.

So this downplays the impact of the iPad, from a company whose strategy is driving the trends; they would be in a position to know. Though it suggests that the 4-foot screen, in the form of Mac laptops, is a major outlet for Netflix product.

I’d love to see data on number of streams and time spent with online video broken down by screen type – current state and recent growth. My hypothesis: the 4-foot screen dominates current online video consumption by far, but dominates less as length of stream increases, with the 10-foot screen being relatively stronger for longer form and the driver of long-form growth.

Though another paragraph in the CNET article suggests that this hypothesis may be U.S. centric, perhaps true only for a culture in which the TV is the center of life:

Former News Corp. executive Peter Chernin, who joined Hastings on the panel, said he agrees, with regard to the U.S. market, but that the story will be very different in developing markets, where big-screen TVs are less commonplace and cheap tablet devices will soon be readily available.

I’ve also argued that over-the-top will penetrate the home through the path of least resistance, assuming that Internet-connected TV, the simplest connection from a consumer perspective, will be the key driver. But both the CNET article and a June 8, 2011 MediaPost piece citing new data from CBS research chief Dave Poltrack suggest that video game systems are currently behind the growth in over-the-top consumption:

Poltrack contrasted Netflix’s remarkable growth with rather tepid adoption rates of other so-called “over-the-top” TV streaming platforms, such as GoogleTV, Boxee and AppleTV, but said that video game platforms such as Microsoft’s Xbox, Nintendo’s Wii, and Sony’s PS3 have become a major means of streaming TV programming, and that many of those platform users are actually doing so via Netflix.

So…it’s a box that already exists in the household, that’s already connected to the TV for some other purpose that is serving to-date as the main over-the-top conduit. And that makes some basic human sense.