Internet TV revenues jump 34% In 2010

As more and more TV viewers in the US continue to embrace the Web to watch the latest tv shows and movies, the revenue made online continues to grow with them. According to IHS Screen Digest, online broadcasters in the US saw a very nice 34% growth in revenue in 2010.

Online broadcasters racked up total revenue of $1.6 billion in 2010, thats up from $1.2 billion in 2009 when revenue growth stood at around 32%. Much of that growth has been driven by the expansion of online advertising, which grew just under 68% in the US to $719 million, up from $436.8 million in 2009.

The growth puts online revenue in a dominant position and a much more attractive proposition to advertisers.

Heading the charge for online broadcasters was the TV streaming site Hulu.com a joint venture of broadcasters, also includes Comcast Corp’s NBC Universal, News Corp’s Fox Entertainment Group and The Walt Disney Co’s Disney ABC TV Group which saw its online advertising revenue double to $200 million in 2010.

Because Hulu ad revenue has doubled between 2009 and 2010, it was weak on driving viewership of its programs, seeing only a 10% growth in consumption in 2010.

Marija Jaroslavskaja, a senior analyst at IHS Screen Digest, said in an interview that Hulu was able to do this by pushing longer videos that can accommodate more ads per show. “Some broadcasters have almost as many ads as they would on normal TV,” she said.

The US broadcaster CW Network is pursuing an aggressive advertising sales strategy. Ms. Jaroslavskaja’s research shows some programs on the CW Network can contain as many as 23 ads. The company’s revenue increased 300% in 2010 to reach $16.5 million as a result.

She said this puts them at risk of being forgotten as a destination to watch TV on the Internet, allowing companies like Netflix to solidify their online presence unchallenged.

“Netflix is now a mainstream phenomena,” she said. Online broadcasters are becoming more effective at monetizing television and video over the Web, said Dan Cryan, an analyst at IHS Screen Digest. “The relatively modest growth in the streaming video area reveals a still tentative approach toward the Internet from some big media companies, which are reluctant to jeopardize their lucrative cable carriage deals by aggressively pursuing online opportunities,” Cryan wrote in a statement.

The news is promising for watching tv on the net as the more revenue coming in will translate to more effort and content being put back in.

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