What’s More Important to You: Bandwidth or TV?

So what’s going on in my house this month that’s forced this Bandwidth vs. TV question?  One word: Boxee.  I could write a whole post on Boxee (maybe next time) — the short story is that thanks to Boxee, I now have the ability to easily watch videos (Netflix, Hulu, CNN, BBC) through my living room television except my Internet connection can’t handle it.  As Captain Kirk would say, "We need more power, Scotty!"  So, I’ve placed the order with a new Internet service provider for 4x more speed than I am currently receiving.  As a result, I’ll become even less reliant on a television schedule and will bring the instantaneous downloads of Netflix not just to my computer, but to my living room, on the TV, where it belongs.

Naturally, all this got me thinking.  We are clearly in the midst of a shift in how media is consumed, but how long will it be until we say something like, "Remember when TV had channels?"  The answer may be sooner than you think.

To get an idea of where we are on this consumer shift, I took a look at Compete’s clickstream data for two video websites providing premier content: Hulu.com and Netflix.com.  Why these sites?  While the online video revolution may have been started by sites like YouTube.com, the premium market is really where the consumer shift is taking place.

Let’s start by looking at Hulu.com — a site that offers more than 1,700 primetime television shows from nearly 190 leading content providers.  Below is a chart showing the past year of unique visitor growth to Hulu.com.

Hulu.com Unique Visistors - Compete.com

  • Hulu.com ranks 144 in Compete.com’s website rankings, netting over 7MM unique visitors in September — that’s a 210% growth over this same time last year
  • If Hulu.com continued this growth trajectory for another year, we could see it break into Compete.com’s top 50, surpassing unique visitor traffic to sites like the NYtimes.com and Netflix.com

Next, I looked at Netflix.com; more specifically, I looked at the volume of unique visitors to the Neflix’s video player as a proportion of all Netflix.com traffic and saw similar results.  While the core of Netflix’s business resides in its traditional DVDs by mail, Compete data clearly shows growing demand for immediate downloads and streaming of Netflix’s catalog.

Netflix.com Video Penetration - Compete.com

  • From September 2008 to September 2009, Netflix.com’s volume of unique visitors viewing movies and other content online increased 163%
  • In September 2008, 6.7% of all Netflix.com domain traffic viewed content through its online video player
  • By September 2009, this number grew to 14.3%, more than doubling its penetration, while Netflix.com domain visits saw continued growth, rising 23% year over year

The trends we are seeing in premium online video providers suggest that the shift in media consumption is well under way, and as this continues, more and more consumers will be asking themselves the same question I did — because it’s not about TV or Internet any more.  It’s about how much TV you get through the Internet.