New research from The Diffusion Group (TDG) predicts that by 2020 the consumption of Internet video – content stored and distributed over an IP architecture – will eclipse the consumption of broadcast TV programming. The rationale for this prediction is explained in TDG’s latest report, "The Economics of Over-the-Top TV Delivery – How Television Networks Can Shift to Online Content Delivery."

According to TDG data, while the amount of time spent viewing TV has remained relatively stable, the amount of time consumers spent watching online video increased 84 percent between 2008 and 2009. When extrapolated across the entire TV-viewing population, the average time spent viewing online video in 2009 was 52 percent more than in 2008. TDG expects that this rate of growth will actually increase during the next 5-7 years due primarily to the increased use of the TV as the platform of choice for Web video viewing.

"The total amount of time spent watching video from all sources, including pay TV and Internet video, will hold constant during the next 10 years at around 32 hours a week," said Colin Dixon, senior partner and co-author of TDG’s new report, in a statement. "With online video usage accelerating we expect the amount of Internet video watched to eclipse the amount of live broadcast TV around 2020."

"Keep in mind that during this period, Internet and broadcast delivery of video content will become blended in such a way that consumers will be unaware of which conduit serves which content," added Dixon.

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