Internet Video Still Some Distance from Inflection Point

By Gary Kim September 08, 2014

The old adage, “it doesn’t matter where you start; it’s where you finish,” applies to most popular consumer technologies, products and services. At various times, some segments have adopted new products faster than others.

That arguably was true of fixed network voice services, broadcast radio, broadcast TV, cable TV, Internet access, computers, mobile voice, smartphones, text messaging and mobile Internet access.

Judging by results of the latest Nielsen Cross-Platform Report, the adage retains its relevance. To be sure, younger consumers figure more prominently in most studies of digital media consumption.

Among consumers 18 to 34, digital media consumption grew 53 percent, year over year.

But adoption of the behavior by older consumers might be even higher.

Impressive growth in digital is even more marked among 35-49 year olds, where consumption of digital media grew 80 percent, year over year. Among consumers 50 to 64, digital media consumption grew 60 percent, Nielsen says.

At the same time, consumption of linear video viewed on TV sets decreased slightly, across all three age groups. In other words, consumers of all ages are watching more content on new screens, compared to televisions.

The product lifecycle is the other important notion. We often judge product success by speed of adoption, the typical inflection point being that a product reaches 10 percent of the market.

Some might note that the Boombox reached 60 percent penetration in seven years. But almost nobody uses one anymore.

The compact disc player reached about 55 percent penetration in seven years while the DVD player reached 50 percent adoption in seven years and the VCR reached 40 percent penetration in seven years.  

The point is that those products, after reaching peak adoption, also have become quite mature, in nearly all cases becoming mostly unused.

We are apparently quite some distance from linear TV product obsolescence, the Nielsen report suggests.

Right now, daily consumption of Internet video averages 30 minutes a day or less, representing about three percent of daily viewing of video content, Nielsen data suggest.

Using past rules of thumb, the inflection point will come when Internet video reaches about 10 percent of daily viewing.

Edited by Stefania Viscusi

Contributing Editor

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