Internet TV means more options, not increased viewing time

The option of watching television online will not influence the amount of time a person spends viewing TV, but it does make the experience more pleasurable, according to a new study.
"Some media reports predict that because people now have access to watch anything they want, anytime they want, they will spend more time watching TV," said Dr Stan Liebowitz, a managerial economics professor in the Naveen Jindal School of Management at The University of Texas at Dallas.
Liebowitz and colleagues examined television consumption during the switch from broadcast TV to cable TV. Because data of current trends in Internet TV viewing won't be available for another 10 to 15 years, the authors prognosticated what is going to happen based on what has happened in the past.

The study found that viewing time essentially stayed the same, regardless if the variety of available TV shows increased.
Liebowitz said consumers have only 24 hours in a day, so giving them more variety does not mean they are going to spend more time watching television.
Although they are not watching more TV, viewers are getting greater enjoyment from watching television via the Internet, according to the study.

"Additional programme choices imply that people will be more likely to find a television show that more closely matches their taste," said Alejandro Zentner, an associate professor of finance and managerial economics in the Naveen Jindal School of Management.

"Because the Internet has brought about additional programme choices, viewers get greater enjoyment," said Zentner.
Because the variety of programmes does not impact the amount of television consumption, the researchers determined that on-demand Internet streaming media companies should not expect to make additional revenues through increased viewing.
Liebowitz said they should focus on subscription revenue - as Netflix has - rather than advertising revenue - as Hulu initially did.
Researchers also found that people who are binge watching episodes of a TV show do not change the total time they spend watching TV. Instead, they are changing what content they are watching.

The study is published in the Journal of Cultural Economics.