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Willing to Pay for Internet TV

July 19, 2010 | Author: Ibex Marketing

As I wrote at the end of last month, the new Hulu Plus service for $9.95 a month stands to disrupt television viewing habits. It provides more content that does not expire, and it’s all offered in 720p high definition.

As it turns out, more and more people view this sort of offering as appealing. Some people have the attitude that everything on the Internet should be accessible for free, but that attitude appears to be changing. A new study by The Diffusion Group (TDG) polled broadband users about the new TV Everywhere initiatives from subscription television services such as cable and satellite. The concept is that existing customers will be able to access the same programming that they receive at home, but can get it as streaming video over the Internet. The TDG survey found out that 60% of the users are enthusiastic about the idea, and a total of 34% would be willing to pay at least $5 a month extra for the privilege.

On the one hand, TV Everwhere could be an important new source of revenue for these services, which are faced with increasing costs of maintaining their physical infrastructure. On the other hand, this sort of Internet streaming service could train their subscribers to get video content online. This could have the unintended consequence of users discovering that they can get enough of what they want from other sources that cost a fraction of their cable or satellite subscription fee. With those fees routinely running $100 a month or more just for television, a lot of households might be willing to chop that to $10 a month, and settle for what they can get from Hulu Plus or Netflix.