Look out, TV is moving online

Updated: Mar 31 2008, 04:26am hrs
Jessica Torrez-Riley, a 20-year-old Northeastern University student, never thought of herself as a big television viewer until she discovered how much TV she could watch without a TV. There were the episodes of Lost that she could catch the next day on ABC.com. And the old episodes of Buffy the Vampire Slayer that she watches on Hulu.com, a new streaming-video site, launched by Fox and NBC, that puts at her fingertips a remarkable bounty of programming.

In high school, I would watch TV at night but I never really was invested in a show because I couldnt be consistent with it, she said. I never really got invested in TV shows until I got my first laptop.

Now, if she chooses, she can get invested in far more than the current Fox and NBC fare that makes up much of Hulus online library, which opened to the public this month. There are also Woody Woodpecker cartoons, clips from the 1990s sketch show In Living Color, and 37 episodes of Starsky & Hutch. Theyre all available for free, supported by unskippable ads as are dozens of movies, from The Big Lebowski to Sideways. And in a nod to the tech-savvy users that make up Hulus early audience, an entire Hulu show can be embedded in a blog.

Hulu stands out because its such an elegantly presented version and it provides so much efficiency, said James McQuivey, who studies TV as a vice president and principal analyst at Forrester Research.

While its now another fledgling site with limited name recognition, Hulu has the potential to be much more: the most addictive time-killer since instant-messaging, the biggest thing to hit TV since the digital video recorder, the next big step toward the day when TV and the Internet are one.

Hyperbole Maybe a little. But TV-industry watchers say Hulu and other sites that stream shows represent a step toward the inevitable convergence of the Internet and TV. Within a year or so, more TVs will come with jacks for Ethernet cords, McQuivey said, allowing an Internet signal to stream directly into the set. More viewers will realise they can use their TVs as monitors. And more people will begin to plug in laptops, fire up a site like Hulu, and watch episodes of the early-90s sitcom Doogie Howser, MD on a 56-inch screen, or watch current network shows whenever they want.

Hulu represents another get-religion step for the networks, which once feared the havoc the Internet would wreak on the long-sacred TV schedule. In 2005, ABC became the first network to make its shows available for purchase on iTunes, and soon afterward started to put some of its current shows online. Other networks developed their own ways to air their shows, embedded with ads.

Advertisers discovered that online video was something to love: Now, their spots could be micro-targeted and rendered impossible to skip. On Hulu, a single advertiser sponsors each individual stream, airing several ads mid-episode or one ad at the end of a short clip. McQuivey said advertisers pay 50% more to place ads online than they would on the network airwaves.

And consumers, he said, dont seem to mind sitting through a few commercials. That frenzied talk about the DVR killing the 30-second spot turned out to be premature.

All the DVR showed was that people want convenience, he said.

The move toward convenience has been building for awhile, but some trends have recently converged. For a long time, DVR use hovered at about 12% of the population, McQuivey said; now, about 26% of Americans have the device, and the expectation that TV schedules scarcely matter. Comcast, the nation's largest cable provider, just announced a new milestone: 7 billion views of its On Demand programmes since 2003. And about 52% of the country has high-speed Internet access, McQuivey said, making streaming video more viable.

Still, so far, viewer behaviour is changing slowly, said Albert Cheng, executive vice president for digital media at the Disney-ABC Television Group. Yet, since its launch in September 2006, more than 280 million episodes of ABC shows have been launched from ABC.com. But online viewers tend to skew relatively young their average age is 28 or 29, compared with the mid-40s average of broadcast network viewers.

Whats driving people to use it primarily is that theyve missed their favourite show, Cheng said. Theres still a preference to sit in front of the television to watch it. And if they cant, then they know that they can at least catch up with it online.

How to best organise online content is still the subject of dispute and experimentation. Current ABC and CBS programs are not part of the Hulu library; but a search for ABCs Desperate Housewives or CBS CSI: Crime Scene Investigation on Hulu quickly sends viewers to those networks' media players. CBS partnered with Joost.com, another video aggregating site, which has yet to catch fire.

Over the last 18 months, Comcast Interactive Media created its own video player, Fancast.com, released to the public in January. It features network shows and movies, points users toward TV listings, and will soon allow them to programme their DVRs directly from the site.

Hulu entered the crowded field relatively recently. It was founded in March 2007 as a joint venture between NBC and Fox which own major stakes in the site, along with the companys employees and an equity firm that invested $100 million. In July, Hulu hired CEO Jason Kilar, an Amazon.com veteran who, according to company spokeswoman Christina Lee, preached an absolute maniacal focus on the user experience.

For Hulu, that meant ease of navigation. As developers built the site, Lee said, Kilar insisted Hulu had to pass his Mom Test: His mother should be able to figure it out on her own in 15 seconds. Before it was ready for test-use, she said, Kilar e-mailed his mother access with no further explanation. Before long, she had called him to say she was enjoying watching Alfred Hitchcock Presents.

Hulu has expanded its library to include offerings from MGM, Sony, Lionsgate, Warner Brothers, the NBA, and the NHL. There are video clips from the Onion News Network and straight-to-the-web series such as Prom Queen. What isnt there is the user-generated content that made YouTube a sensation. Hulu will remain a site for professional shows, professionally produced, Lee said.

We want to stand for something and we want to stand for premium content, she said.

McQuivey said YouTube really isnt Hulus competition. YouTube really fills that social need we have to have a shared story as a country, and shared jokes and shared inspiration, he said.

Hulu, he said, fills our national need for TV. (He predicts the site will be used much more often for TV than for movies.)

Right now, Hulu isnt giving out numbers, but Lee said its use has exceeded expectations. So has its depth: Each week, Lee said, more than 80% of the sites video library is viewed. Which means that right now, somewhere, someone is probably glued to a desktop computer, watching WKRP in Cincinnati.

NY Times / Joanna Weiss