Net TV gets juiced

Catherine Holahan
14 May 2007

NBC executives had two reservations about putting full-length episodes of their current lineup online, says George Kliavkoff, NBC Universal's (GE) chief digital officer. The first was that no one would watch. The second was that everyone would watch"”and then stop watching TV.

It was the former concern that seemed most likely to derail the company's digital effort. Conventional wisdom held that the computer was for clips, that people liked snacking on short movie trailers, TV clips, and strangers' two-minute home videos. How else to explain the millions flocking to YouTube, the video-sharing site acquired by Google (GOOG)‾ But how many TV fans would bother to watch a 30-minute TV show on a small player or a 17-inch screen, especially if they have a 42-inch-plus, high-definition screen waiting at home‾

Lots of them, apparently. Since last fall, when many networks began streaming full-length episodes of their prime-time shows online, Web surfers have shown a willingness to sit in front of the computer and watch TV-length programs (see, 10/11/06, 'Click Here to Catch Up on CSI'). NBC has had 100 million streams of its shows since last fall. 'Lots and lots of people are doing this, and they are sitting through entire episodes,' says Kliavkoff.

Not just for couch potatoes

It's that growing desire to watch online TV for increasingly long stretches that helps explain the enthusiasm for Joost, the Internet television service begun by Skype (EBAY) founders Janus Friis and Niklas Zennstrom. The service, which has been available to invited users, boasts the ability to deliver full-screen, high-quality video content on the computer. On May 10, the company said it got $45 million in funding from Index Ventures, Sequoia Capital, CBS (CBS), Viacom (VIA), and the Li Ka Shing Foundation. 'Joost allows content owners to reach an audience of any size at any time where the viewer can 'lean back' to enjoy an immersive yet interactive video experience,' Roelof Botha, general partner of Sequoia Capital, said in a statement.

The change in TV watchers' habits also explains why companies such as News Corp. (NWS) and NBC Universal are partnering to launch their own tools and sites for premium online TV content (see, 3/23/07, 'YouTube May Have Met Its Match'). If people are watching long-form content on the Web already, even before the long-awaited devices that promise to beam computer content to the big screen, then millions more will watch when quality improves. 'This is an opportunity,' says Kliavkoff, who also serves as the interim CEO of News Corp. and NBC's joint venture.

Warner Bros. sees Joost and similar services as a chance to make extra advertising money from older shows that are no longer in syndication as well as from newer series. The company is offering a channel of its sci-fi shows through Joost and plans to offer more programming through similar services such as on Time Warner's (TWX) AOL In2TV site.

'There are a lot of places where you go and have a device that has Internet access with you,' says Craig Hunegs, executive vice-president for business management at Warner Bros. Television Group. 'I would imagine that there are people at work who are spending time watching television in their office that never had a television in their office before.'

It's TV whenever, wherever

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