A few years ago, news stories were filled with predictions of the death of television. Yet, according to Nielsen figures, the number of homes watching television has actually gone up, with the number of homes using digital video recorders (DVR’s) shooting up by 56 percent between 2007 and 2008 alone. Television is experiencing a resurgence. So what’s going on? Did television suddenly get better? Maybe. Did access to television shows streaming on demand, twenty-four seven, in hi-definition, suddenly become more than a viable option? Absolutely.
The key has been cloud computing and the websites that have taken full advantage of the technology. To understand how cloud computing has changed the landscape, take a look at these figures from Nielsen released in April 2009. Since 2003 the number of users visiting online video sites has shot up 339 percent. Time spent on those same sites has shot up 2,000 percent. In 2008 alone, online video viewership was up 10 percent, the number of streams grew 41 percent, the time spent watching these streams grew 71 percent. And that trend is only set to continue.
Take Netflix, Hulu and ABC. Cloud computing has enabled them to offer unlimited simultaneous streams direct to as many of their customers who want them. There’s no waiting for a broadcast time, as it’s on demand. Netflix is a subscription service, but doesn’t have to be. Hulu (which has deals with Fox, NBC and Disney) and ABC offer episodes for free, but just like television, it streams in commercial breaks. This was such a hot button issue in 2008 that the Writers Guild of America went on strike for three months to make sure they got paid through that revenue stream, as TV companies were trying to pass these streams off as promotional, despite earning billions from them.
And sites like these are still on the rise. In June 2009, Lionsgate, MGM, and Paramount/Viacom announced they were teaming up to launch EpixHD which aims to provide a cable on demand service and an online stream service at the same time, to compete with the likes of HBO, Showtime and Cinemax.
The need for server and processing farms to “feed the cloud” has led to a boom in unlimited scalable server farms. Amazon’s EC2 already offers storage and processing capacity on a metered service as a utility, and Apple recently announced plans to build an additional one billion dollar server farm.
The impact has been as unexpected as it is dramatic. The easy access to TV through DVR recordings, on demand cable, and online programming has allowed viewers to catch up on shows they otherwise would have missed. It has even allowed viewers to join shows that are already a season or two old because episodes from previous seasons are just a click away.
This has led to an explosion in the ability of customer relationship management tools to track trends in television viewing habits through the services being provided. Corporations have no need to access nightly Nielsen figures to determine viewership. They are able to log the viewing figures instantly and track how shows are performing in real time. This information has effected the planning, marketing and scheduling ofnew seasons of shows on TV and the release of DVD boxed set releases, creating a revenue stream that is also a marketing and hype machine.
Some analysts predict that at some point the Internet and television will merge into one entity, and that may be true. However, the prediction was made based on an old paradigm, and technology is changing every day. But what’s already clear is that the resulting hybrid will be nothing like either one because the possibilities inherent in cloud computing are only just starting to be realized.
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