Final Paper (BEA Version)

Trends in Online TV
Who’s Watching and Who’s Paying
Submitted to: Broadcast Education Association

Division: Interactive Media and Emerging Technologies
Debut Entry
A/V Requirements: Computer, Projector
Researchers:
Sam Cadet scadet1@gmail.com 973-493-6323

Bobak Shafiei bobak@shafiei.net 301-332-5830
Alice Twyne atwyne@syr.edu 315-307-3112
Teng Zhang idontlovesars@gmail.com 315-663-8123
December 5, 2008
Syracuse University
S. I. Newhouse School of Public Communications
215 University Pl.
Syracuse NY 13035
Trends in Online TV -2-
Abstract
This study attempts to examine the trends in online TV usage from both ad-
supported websites (such as hulu.com) and pay-to-download services (such as iTunes).
Three hypotheses were tested:
H1: The online viewer is young (between ages 18 and 24) and
technically savvy
H2: Ads during online TV programs are more irritating to the viewer
than ads during traditional TV programs
H3: Online TV is used primarily to catch up with already-familiar

shows.
H1 was partially supported, partially refuted; H2 was refuted; H3 was partially
supported, partially refuted. Additionally, observations were made from the data
including:
• Ad-supported sites were preferred over pay-to-download sites

• Use of traditional TV dominated other media
• Viewers were moderately satisfied with the availability of content
online
• Education had no bearing on online TV use
• More Internet usage equated to more use of ad-supported TV sites
• Hulu.com was the respondents’ favorite site
The research team concludes: 1) online TV is popular and is increasing, 2) people are
willing to pay to download familiar content, 3) quantity and variety of content available
online are key, and 4) the Internet can be a primary source for programs.
M.A. students at Syracuse University conducted this study. It took place between
November 9 and November 21, 2008. A 27-question, volunteer survey was
administered via http://freeonlinesurveys.com. 270 people responded with the
majority being college-educated, young females.
-December 5, 2008- Cadet, Shafiei, Twyne and Zhang

Introduction and Literature Review
Television viewing is an integral part of most American’s lives and this love affair
is growing. According to a recently released Nielsen Media Research study
(SFGATE.com, 11/24/08), Americans are watching one more hour of television a day
than they did 10 years ago. But today’s television viewer has many more options for
getting his or her daily fix than they did a decade ago. The rise of the Internet has
included a rise in people viewing their television programming online, according to
Nielsen. And the options for viewing television content online are growing as fast as the
medium itself. Online TV includes free and paid content and offers a host of sites on
which to view major television network broadcasts. Many sites such as hulu.com even
include the commercials. The purpose of this study is to take a closer look at online
television viewers both their habits and the way in which they view content. We hope to
find correlations between online TV viewership and such factors as age, gender and
technical savvy that will give us a better picture of the online viewer and present options
for how best to increase viewership.
The Economist’s “Business: What’s on next, the future of television” discusses the
issues involving networks apprehension towards online television. The article notes that
online TV is very much in the development stage at this point. Networks have mostly
only been willing to invest time and money using the Internet to promote their own
content. Thus sites such as ABC.com feature ABC programming exclusively, for
example. The potential for Internet growth lies in sites that are able to distribute
content from many sources under one banner. Sites such as hulu.com offer
programming from across the spectrum; from network programming to original web-
exclusive programming such as “Dr. Horrible’s Sing-Along Blog”. Our study will look

into the popularity of these “spectrum sites” to determine if there is any preference
among viewers for sites that offer not only network programming but new and
innovative content as well versus sites devoted to a single network’s programming.
In reviewing current literature relating to our study, we were influenced by a few
relevant studies. In their study entitled “Social Implications of the Internet,” authors
Paul DiMaggio, Eszter Hargittai, W. Russell Neuman and John P. Robinson note that
truly, the Internet is changing everything. The authors assert that sociologists must
include the internet in any study of cultural and societal trends for three reasons: “1) the
medium’s rapid growth offers a once-in-a lifetime opportunity for scholars to test
theories of technology diffusion and media effects during the early stages of a new
medium’s diffusion and institutionalization, 2) the Internet is unique because it
integrates both different kinds of context (text, video, visual images, audio) in a single
medium. This versatility renders plausible claims that the technology will be implicated
in many kinds of social changes, perhaps more deeply than television or radio, 3)
Choices are being made – systems developed, money invested, laws passed, regulations
promulgated—that will shape the system’s technical and normative structure for
decades to come. Many of these choices are based on behavioral assumptions about how
people and the Internet interact. We believe such assumptions should represent more
than guesswork (DiMaggio, Hargittai, Neuman, Robinson, Social Implications of the
Internet, Annual Review of Sociology, Vol. 27, 2001, p308).” To that end, in designing
our study, we sought to measure and test theories about online television viewing and
the online television viewer.
Network programming has been influenced by the growing popularity of online
sites, such as Hulu.com, that provide a new distribution medium for television

programming. Some networks, such as NBC, made their programming available online
before it premiered on network television. Our study sought to determine if viewers
would be willing to watch their favorite programs online and then what aspects of that
online environment would affect their decision, for example, online ads and free vs. pay-
to-view. The authors note that “patterns of inequality,” from educational differences to
technical abilities determine use of the new medium. Studies done by the National
Telecommunications and Information Administration (NTIA 1995, 1998, 1999, 2000)
showed “documented differences in Internet access favoring the college educated
(DiMaggio, Hargittai, Neuman, Robinson, Social Implications of the Internet, Annual
Review of Sociology, Vol. 27, 2001, p311).” Differences also exist between men and
women and the young and old based on technical savvy and access. We plan to test these
differences in our study.
The authors also note that “early studies tended to focus on online role-playing
games [e.g. multi-user dungeons or MUDs (Turkle 1995)] (DiMaggio, Hargittai,
Neuman, Robinson, Social Implications of the Internet, Annual Review of Sociology,
Vol. 27, 2001, p317).” And DiMaggio, Hargittai, Neuman and Robinson, in discussing
the financial prospects of the medium noted, “We cannot yet tell to what extent (and
how) media firms will be able to wring profits from Web-based entertainment.” Our
study seeks to address both these issues by: 1) focusing on online television viewing and
2) testing the potential of pay-to-download to draw an audience. We feel that these
unique perspectives may add to the body of research that has been conducted.
Another question that we reviewed in designing our study was whether viewers
were concerned or overly annoyed by the advertising presented during programming.
One study, by author Xia and D. Sudharshan noted that “Although recognized as an

important construct in consumer decision models (Bettman, 1979), interruptions have
not been widely studied. This is perhaps at least partially due to the difficulty in
unobtrusively measuring consumer reactions to interruptions (Xia, L. and D.
Sudharshan, Effects of Interruptions on Consumer Online Decision Process, Journal of
Consumer Psychology, Vol. 12, No. 3 (2002), p. 265).” The authors noted that an online
environment could be studied least obtrusively. They determined that it was the goal of
the consumer, rather than the frequency or length of the interruption, that determined
the level of frustration with the task and the interruption. Thus, a consumer with an
abstract goal would not be affected by the interruption whereas a consumer with a
concrete goal was affected and would abandon completion of the task. We attempted to
study the impact of advertising interruptions on consumers’ enjoyment of the program
to see if this study would hold true for advertising interruptions during programming.
The authors used two measures, interruption frequency and participant’s perception of
interruption frequency. Because of the variance in ad frequencies and lengths on various
sites, we decided to instead measure perceptions of the interruption. Our hypothesis is
that the consumer is motivated to finish the program with a concrete goal and would
therefore be very irritated with the online advertising. Conversely, if the viewer is
attempting to fulfill a leisure-related goal, this goal is abstract.
In his article on household usage of the Internet, author Edward Comor notes
that the use of the Internet is a function of those with leisure time, money and savvy.
According to Comer, “more and more free time is being taken up by people using the
Internet as a kind of high-tech interactive television system (Comor, E., Household
Consumption on the Internet: Income, Time and Institutional Contradictions, Journal
of Economic Issues, Vol. 34, No. 1 (Mar., 2000) p. 111).” Comor’s hypothesis is that

those who use the Internet are older and richer and used to gadgets that make their lives
easier. Our study seeks to supplement that hypothesis by relating age and technical-
savviness to use of online TV.
In summation, the main points focused on in these articles were that networks,
cable stations, marketers, and advertisers are willing to invest in online television for
now.
Research Objectives
Our study set out to test 3 hypotheses:
H1: The online viewer is young (between ages 18 and 24) and
technically savvy
H2: Ads during online TV programs are more irritating to the viewer
than ads during traditional TV programs
H3: Online TV is used primarily to catch up with already-familiar

shows.
In addition, we are looking for trends in the data that may reveal insights into online TV
usage.
Method
A volunteer survey was administered via http://freeonlinesurveys.com. Prior to
running the study, a pilot test was administered to 4 people. This allowed for revisions
and additions to be made to the survey. To recruit respondents, the survey was
advertised via email, social networking sites (such as Facebook.com) and fliers.
Additionally, one Syracuse University professor offered extra credit to students who
participated. Data collection took place between November 9 and November 21, 2008.

Data Transformations and Manipulations
Certain manipulations and recoding of the data were necessary in order to test
the hypotheses.
Age
First, the data about age groups required recoding. In the survey, respondents
specified their age. The range was 16 through 69 with an average age of 26.40 and a
median age of 23 (see Figure 1). In other words, the majority of people fell in to the
young-adult category. Since the study concerns television viewing, Nielsen scales were
used (see Figure 2).
Figure 1: Age Data [As Entered]

Figure 2: Age Groups for Recoding

Age Range Recoded
Value
Under 18 1
18 – 24 2
25 – 34 3
35 – 49 4
50 – 64 5
60 and Above 6
Recoding the ages in this fashion allowed correlations to be made concerning various
age groups (otherwise, the dispersion of ages proved to be too great to allow for any
meaningful relationships to be ascertained).
Education
The next variable that required recoding was education due to a mistake in the
scale. Respondents were asked to mark the highest level of education that they had
completed. However, Associates Degree and Bachelor’s Degree were combined into one
option, providing no distinction between respondents who held one or the other. As
such, this data was recoded as follows:
Figure 3: Recoded Education Values
Original Response Recoded Value

Less Than High School Diploma Less than
High School Diploma College 1
Some College Degree
College
Associate’s or Bachelor’s Degree 2
Degree
Some Graduate School More than
Master’s Degree College 3
Doctorate/Professional Degree Degree

Trends in Online TV - 10 -
Feelings Towards Advertisements
The final necessary data transformation involved the scales on questions
concerning respondents’ feelings towards advertisements (both on traditional TV and
online TV). While the scales appeared to pose no problems during administration of the
questionnaire, they needed to be rearranged to allow for mathematical analyses. The
scales were recoded as follows:
Figure 4: Ad Response [Recoded]
Original Order Recoded Order

1 Unaffected 1 Interested
2 Interested 2 Unaffected
3 Irritated 3 Irritated
4 Annoyed 4 Annoyed
The primary reason for reordering these scales was the meaning of the word
“unaffected.” In this case, the word essentially meant “neutral” and as such, belonged in
the middle of the scale instead of on the periphery.
Technical-Savviness (Device Ownership/Use)
As previously mentioned, a quick glance at the data revealed other possible
measurements that could be derived. The most desired piece of data concerned how
“technically-savvy” a respondent was. While the concept of “tech-savviness” is difficult
to pin down, it was decided that the best measurement would be to count the number of
devices each respondent owned.1 This resulted in a score from 0-13.2
1 Other questions gauged the amount of time spent with various technologies.
2 The question gave respondents 13 options along with an open-ended space to indicate other items. Only
11 respondents included an answer in this space and many simply duplicated one of the choices. As such,
it was excluded from the count.

Results
270 people responded to the questionnaire. The average age was 26.4 and the
majority of respondents were female (75.9%). When recoded for age, 60.0% fell into the
18-24 group. Over half had at least a college degree (60.7%). Ethnicity, income and
employment status were not measured.
Table 1: Age, Sex and Education

N %
AGE GROUP Under 18 5 1.9
18-24 162 60.0
25-34 73 27.0
35-49 11 4.1
50-64 16 5.9
65+ 3 1.1
TOTAL 270 100.0
GENDER Male 65 24.1

Female 205 75.9
TOTAL 270 100.0
EDUCATION Less than College Degree 106 39.3

College Degree 74 27.4
More than College Degree 90 33.3
TOTAL 270 100.0
Every respondent reported being an Internet user. The majority were modest
users: 38.9% reported going online between 1 and 3 hours per day while an equal
percentage used the Internet between 3 and 6 hours per day. A smaller portion (20%)
were heavy Internet users, reporting over 6 hours of use per day.

The use of computers to watch TV3 was not nearly as high. Most people used
their computers in this manner less than one hour per day (45.6%). A significant
portion reported not watching any TV on their computers (26.3%). Very few people
were heavy computer TV users (only 2.2% reporting 3 or more hour of use per day).
Table 2: Daily Internet and Computer TV Use

N %
DAILY INTERNET USE No Use 0 0.0
Less than 1 hr. 6 2.2
1-3 hrs. 105 38.9
3-6 hrs. 105 38.9
6+ hrs. 54 20.0
TOTAL 270 100.0
DAILY COMPUTER TV No Use 71 26.3

*Using a computer Less than 1 hr. 123 45.6
to watch TV programs 1-3 hrs. 70 25.9
from ad-supported or 3-6 hrs. 4 1.5
pay to download sites 6+ hrs. 2 0.7
TOTAL 270 100
When asked whether they had ever visited an ad-supported website for TV
programs, the majority (84.8%) reported that they had. However, when asked about
pay-to-download sites, less than half reported use (37.4%). This data coincides with the
frequency of use of these respective services: 23.7% of respondents reported moderate
usage of ad-supported sites compared to only 5.6% with regards to pay-to-download
sites.
3Includes watching TV programs from ad-supported sites and pay services. Does not include use of TV
tuners or DVD/Blu-Ray usage.

It is important to note that a slight discrepancy exists between the data from the
two aforementioned sets. When asked to answer “yes” or “no” to whether they had ever
visited an ad-supported or pay-to-download site, 15.2% and 62.6% answered “no,”
respectively. However when asked to rate their frequency of use of these services, the
percentages who answered “no use” were 13.3% and 59.6%, respectively. These
differences are most likely the result of maturation or instrumentation errors: As the
survey progressed, respondents may have experienced some fatigue and answered
incorrectly. Furthermore, one question only provided two possible answers while the
other provided a 6-choice scale, possibly confusing respondents. Still, the differences
are minute enough to be negligible.
Table 3: Computer TV Details

N %
VISITED AD-SITE Yes 229 84.8
No 41 15.2
TOTAL 270 100.0
VISITED PAY-SITE Yes 101 37.4

No 169 62.6
TOTAL 270 100.0
FREQUENCY OF USE No Use 36 13.3

Ad-Site Very Infrequent 45 16.7
Infrequent 59 21.9
Moderate 64 23.7
Frequent 43 15.9
Very Frequent 23 8.5
TOTAL 270 100.0

Pay-Site Very Infrequent 51 18.9
Infrequent 33 12.2
Moderate 15 5.6
Frequent 5 1.9
Very Frequent 5 1.9
TOTAL 270 100.0

Next, respondents were asked to gauge their feelings towards ads. They rated
their feelings along the following scale:
Table 4: Ad Response Scale

1 Interested
2 Unaffected (Neutral)
3 Irritated
4 Annoyed
1=Most Positive, 4=Least Positive
Here, the results were surprising. While it was hypothesized that online TV ads would
rate low, a more favorable response to traditional TV ads was expected. Respondent’s
feelings towards ads on the two mediums were similar.
A substantial portion (37%) said that the ads did not affect their feelings (both
traditional and online TV). Only 5.2% reported being interested in traditional TV ads
while even fewer (1.9%) expressed interest in online TV ads. The rest of the people felt
either “irritated” or “annoyed” by ads, regardless of the medium.
Table 5 : Ad Responses
N %
RESPONSE TO TV ADS Interested 14 5.2
Unaffected 100 37.0
Irritated 78 28.9
Annoyed 78 28.9
TOTAL 270 100.0
RESPONSE TO ONLINE-TV ADS Interested 5 1.9

Unaffected 100 37.0
Irritated 78 28.9
Annoyed 87 32.2
TOTAL 270 100
When the responses marked “irritated” and “annoyed” are combined, the results
become more clear: people, in general, do not like ads, regardless of the medium.

Table 6: Ad Responses [Condensed]

N %
RESPONSE TO TV ADS Interested 14 5.2
Unaffected 100 37.0
Irritated + Annoyed 156 57.8
TOTAL 270 100.0
RESPONSE TO ONLINE-TV ADS Interested 5 1.9

Unaffected 100 37.0
Irritated + Annoyed 165 61.1
TOTAL 270 100
In order to adequately refute the hypothesis (H2), a Spearman correlation test was run:
Table 7: Ad Responses Correlation

SPEARMAN'S RHO
Response to
Response to Online TV
TV Ads Ads
Response to TV Ads Correlation Coefficient 1.000 .327**
Sig. (2-tailed) 0.000
N 270 270
Response to Online TV Ads Correlation Coefficient .327** 1.000
Sig. (2-tailed) 0.000 .
N 270 270
**. Correlation is significant at the 0.01 level (2-tailed).
Here, the correlation coefficient (r) is equal to .327. As such, a moderate positive
relationship exists between a respondent’s feelings towards ads on TV and ads on online
TV. In other words, a person’s feelings towards ads are similar, regardless of the
medium. Since a more favorable response to traditional TV ads was expected, the
hypothesis H2 was refuted.
A surprising finding was that respondents preferred traditional TV to any online
format. 86.2% reported their use of traditional TV to be “moderate,” “frequent” or “very
frequent.” Concerning ad-supported online TV, only 48.1% reported similar usage. Pay-

to-download TV was the lowest used, with only 9.3% reporting moderate or above
usage.
Table 8: Frequency of Use

N %
Ad-Site Very Infrequent 45 16.7
Infrequent 59 21.9
Moderate 64 23.7
Frequent 43 15.9
TOTAL 270 100.0

Pay-Site Very Infrequent 51 18.9
Infrequent 33 12.2
Moderate 15 5.6
Frequent 5 1.9
Very Frequent 5 1.9
TOTAL 270 100.0

Traditional TV Very Infrequent 10 3.7
Infrequent 19 7.0
Moderate 48 17.8
Frequent 57 21.1
TOTAL 270 100.0
Table 9: Moderate or Higher Use

N %
FREQUENCY OF USE No Use, Infrequent or Very Infrequent 140 51.9
Ad-Site Moderate or Higher 130 48.1
TOTAL 270 100.0

Pay-Site Moderate or Higher 25 9.3
TOTAL 270 100.0

Traditional TV Moderate or Higher 233 86.2
TOTAL 270 100.0

Traditional TV dominated online TV in another category as well: medium
preference for season premiere. NBC made a bold move earlier this year when it
decided to run its season premiere for 30 Rock online before4 its broadcast. Given the
choice, however, respondents largely preferred to stick with traditional TV to watch
season premiers. Only 15.6% said that they would prefer to view a season premiere
online. These findings support the hypothesis H3.
Table 10: Season Premiere Preference

N %
MEDIUM Traditional TV 228 84.4
Online TV 42 15.6
TOTAL 270 100.0
Respondents were modestly satisfied with the content available on both ad-
supported and pay-to-download sites. The majority who used these services reported
being able to find “some” of the programs they wished to watch: 75.1% for ad-supported
sites and 66.7% for pay-to-download sites (see Table 11). Furthermore, the correlation
coefficient (r) for these two services was .371 (see Table 12). In other words, possessed
similar feelings towards both sits in terms of content availability.
4 Typically, episodes do not appear online until after their initial broadcast.

Table 11: Satisfaction with Content Availability

N %
SATISFACTION W/ AVAILABILITY All Programs 39 14.4
Ad-Supported Sites Some Programs 163 60.4
No Programs 15 5.6
Non-User 53 19.6
TOTAL 270 100.0
-Among Users Only All Programs 39 18.0

Some Programs 163 75.1
No Programs 15 6.9
TOTAL 217 100.0
SATISFACTION W/ AVAILABILITY All Programs 21 7.8

Pay-To-Download Sites Some Programs 58 21.5
No Programs 8 3.0
Non-User 183 67.8
TOTAL 270 100.0
-Among Users Only All Programs 21 24.1

Some Programs 58 66.7
No Programs 8 9.2
TOTAL 87 100.0
Table 12: Correlation of Satisfaction with Content Availability

SPEARMAN'S RHO Ad-
Supported
Pay-to-
Download
Sites Sites
Ad-Supported Sites Correlation Coefficient 1.000 0.371

Satisfaction with Selection Sig. (2-tailed) 0.000
N 217 83
Pay-to-Download Sites Correlation Coefficient 0.371 1.000
Satisfaction with Selection Sig. (2-tailed) 0.000 .
N 83 87
**. Correlation is significant at the 0.01 level (2-tailed).
The respondents were largely very technically savvy.5 The average number of
devices owned or use was 8 (out of a possible 13). The median score was also 8 while
5 This was measured by counting the number of devices respondents claimed to own or use.

the mode was 7. As illustrated in the graph below, the majority of people (67%) fell in
the middle, owning or using between 5 and 9 devices:
Figure 5: Device Ownership/Use
Trends in the Data
The novelty of the Internet as a distribution medium for television programs
requires an examination of its usage. In other words, who is watching TV online and
what factors might predict future use?
Age
Age was found to have a bearing on the usage of ad-supported sites, but not on
pay-to-download site. In general, younger people were more likely to use ad-supported
sites to view TV. No relationship was found between age and use of pay-to-download
sites (see Table 13).6 This finding partially supports and partially rejects the hypothesis
H1.
6 This may be due to the relatively low usage rate of pay-to-download services reported in this survey.

Education
No trends were found supporting a claim that more education leads to higher use
of online TV, whether ad-supported or pay-to-download (see Table 13).
Daily Internet Use
Greater users of the Internet were more likely to be users of online TV through
ad-supported sites. However, Internet use had no effect on pay-to-download usage (see
Table 13).
Daily Online TV Use
Respondents who used more online TV per day were far more likely to have
visited ad-supported sites to do this viewing. Still, a significant relationship was found
between high online TV usage and use of pay-to-download sites, albeit not nearly as
high as that for ad-supported site usage (see Table 13).
Technical-Savviness (Device Ownership/Use)
Owning or using more technology did not have a significant effect on the use of
ad-supported sites. However, owning or using more technology tended to drive more
users to visit pay-to-download sites (see Table 13). This finding partially supports and
partially rejects hypothesis H1.

Table 13: Predictors of Online TV Use

Factor A Factor B Corr. Coef. N
Age Ad-Supported Site Use r = -0.204 270
Pay-To-Download Use r = -0.031 270
Education Ad-Supported Site Use r = -0.115 270

Daily Internet Use Ad-Supported Site Use r = 0.257 270

Daily Online TV Use Ad-Supported Site Use r = 0.623 270

Pay-To-Download Use r = 0.160 270
Technology Ownership/Use Ad-Supported Site Use r = 0.030 270

("Tech-Savviness") Pay-To-Download Use r = 0.139 270
Favorite Ad-Supported Site
Respondents were asked to choose their favorite ad-supported site among a list of
the major broadcast networks. Of the people who reported using ad-supported sites,
hulu.com was the favorite (38.4%) followed by ABC.com (27.4%).
Table 14: Favorite Ad-Supported Site

N %
FAVORITE SITE Hulu.com 84 31.1
CBS.com 8 3.0
ABC.com 60 22.2
NBC.com 21 7.8
FOX.com 11 4.1
Non-User 51 18.9
Other 35 13.0
TOTAL 270 100.0
AMONG USERS ONLY Hulu.com 84 38.4

CBS.com 8 3.7
ABC.com 60 27.4
NBC.com 21 9.6
FOX.com 11 5.0
Other 35 16.0
TOTAL 219 100

The high preference towards hulu.com suggests that viewers prefer a site that hosts a
variety of content as opposed to one that only hosts a single type.
Opinions of Online TV
The vast majority of people preferred ad-supported sites. When asked whether
they would prefer to obtain a program from either an ad-supported site or a pay-to-
download site, 96.5% of online TV users reported a preference for ad-supported sites.
With regards to viewing unfamiliar programs, 51.5% preferred ad-supported sites while
only 2.2% would consider using a pay-to-download site for such a program.
Table 15: Preference of Medium

N %
FOR UNFAMILIAR PROGRAM Yes 100 37.0
on Ad-Supported Site Maybe 139 51.5
No 31 11.5
TOTAL 270 100.0
FOR UNFAMILIAR PROGRAM Yes 6 2.2

on Pay-To-Download Site Maybe 64 23.7
No 200 74.1
TOTAL 270 100.0
PREFERED MEDIUM FOR PROGRAM Ad-Supported Site 223 82.6

Pay-To-Download Site 8 3.0
Do Not Use Online TV 39 14.4
TOTAL 270 100.0
PREFERED MEDIUM FOR PROGRAM Ad-Supported Site 223 96.5

Among Users Only Pay-To-Download Site 8 3.5
TOTAL 231 100.0

These results suggest that while viewers might generally prefer online TV as a
supplement to traditional TV (i.e., to catch up on their favorite shows), as long as the
barriers to access are low, they will venture online to explore unfamiliar content. While
not necessarily concurrent with the hypothesis H3, these findings do not outright reject
it either.
Summary of Results (See Page 7 for Research Objectives)
The hypotheses resulted as follows:
H1: Partially Supported, Partially Rejected
H2: Rejected
H3: Partially Supported, Partially Rejected
Additionally, the data show the following trends:
• Ad-supported sites were preferred over pay-to-download sites

• Use of traditional TV dominated other media
• Viewers were moderately satisfied with the availability of content
online
• Education had no bearing on online TV use
• More Internet usage equated to more use of ad-supported TV sites
• Hulu.com was the respondents’ favorite site
Discussion of Results
H1: The online viewer is young (between ages 18 and 24) and technically savvy
This hypothesis was partially supported and partially refuted. Younger people
tended to be higher users of ad-supported sites, however no relationship existed
between age and use of pay-to-download sites. These results make sense: the
population sampled consisted largely of college or graduate students who may not have
the money to spend on pay-to-download sites. The lack of a correlation between age

and pay-to-download sites might be explained by the relatively low usage of such sites
among the sample. In other words, sampling only those who actually used the services
might allow for a relationship to be found.
Conversely, owning more technology (technical-savviness) did not relate to use of
ad-supported sites, but did predict usage of pay-to-download sites. Again, this makes
sense. The only pieces of technology required to watch TV on an ad-supported site are a
computer and an Internet connection. While these are also the only pieces required to
take advantage of pay-to-download sites, many other devices can access these sites
(while many cannot yet access ad-supported sites). Often, these devices include services
that easily integrate pay-to-download content with the device. One example is Apple
Corp.’s iTunes service. Users may pay to download a TV show and then use it on their
iPod or AppleTV devices. This ease of integrating content with devices may explain this
relationship between technical-savviness (device ownership and use) and use of pay-to-
download sites. Such a question was, unfortunately, not addressed in this study, but
warrants further research.
H2: Ads during online TV programs are more irritating to the viewer than ads during
traditional TV programs
This hypothesis was refuted. While viewers found online TV ads to be irritating or
annoying, they had nearly identical opinions regarding traditional TV ads. This result
was surprising. During a traditional TV broadcast, viewers can elect to leave the room,
change the channel or engage in another activity instead of watching the ads.
Effectively, the ads become mere background noise.
However during online TV, the ads are often forced upon the viewer. Even though

he or she may elect to ignore the ad, some sites (such as ABC.com) require interaction
from the viewer in order to return to the program. In other words, the viewer must
usually click on a button. This required interaction makes the TV viewing experience
slightly less passive than it otherwise might be. As such, it was expected that users
would feel more irritated by these online ads than by their traditional TV counterparts.
Still, other research suggests that users respond more favorably to online TV ads.7
The results in this study might be skewed due to instrumentation errors or
(unintentional) researcher bias. The scale used to gauge feelings towards ads was not
balanced: there were more negative options than positive ones. As such, respondents
may have been forced into a more negative choice than they otherwise may have been.
Additionally, this error was an oversight on the part of the researchers. In summation,
while the hypothesis was refuted, the conclusion about online TV ads vs. traditional TV
ads warrants skepticism.
H3: Online TV is used primarily to catch up with already-familiar shows
This hypothesis was partially supported and refuted. Viewers are still more likely
to use traditional TV over online TV. In fact, they were approximately 5 times more
likely to view a season premiere on traditional TV than they were online. But, the
majority of people have used an online service to obtain TV programs. Furthermore, a
significant portion has declared that they would consider using ad-supported sites to
explore unfamiliar TV content.
7 A Millward Brown study found that when a program was watched on the web, viewers were about 11%
more likely to watch the ads. Additionally, web-viewers were 4 times more accurate at recalling the ad
than their traditional TV counterparts (Morrissey, 12).

This trend appears to be that the Internet has the possibility of being a primary
distribution method as opposed to one that merely supplements traditional broadcast.
While the Internet still has a long way to go (based upon viewers’ preferences for
traditional TV), many factors are helping it along. First, online TV viewers can easily
choose which shows they wish to watch and when they wish to watch them. Second,
connecting a device to a TV set for the purposes of watching online TV is becoming
easier.8 Finally, networks are experimenting with online distribution of content (see the
aforementioned “Dr. Horrible’s Sing-Along Blog,” page 3). If the content is there,
viewers seem willing to use it.
Other Trends
Perhaps the most useful finding concerned the availability of online TV content.
Most respondents reported only a moderate satisfaction with the selection of programs
online (from either ad-supported or pay-to-download sources). Ideally, every program
a person wanted to view should be accessible online. This study found that viewers are
more likely to use an ad-supported site, but many do use pay-to-download sites.
Furthermore, while it was not explicitly asked, an inference can be made that people are
more likely to purchase familiar or favorite TV shows.9
A final observation regards respondents’ favorite ad-supported site: hulu.com. As
a joint venture between NBC and FOX, the site offers a variety of content including full-
length TV shows, short clips of shows, and movies. Perhaps the most innovative content
8 For instance, Apple’s AppleTV and Microsoft’s X-Box Live allow viewers to browse, pay for and watch
TV programs on devices connected to their TV set. Furthermore, Netflix recently (November, 2008)
integrated their service with X-Box Live, allowing subscribers to access Netflix’s library of TV shows from
their TV sets.
9 37.4% of respondents had purchased a TV show in the past from a pay-to-download site, but only 2.2%
said that they would purchase an unfamiliar show.

on hulu.com, however, was “Dr. Horrible’s Sing-Along Blog.” The series was created
exclusively for the web and has been immensely popular.10 Hulu.com’s popularity
suggests that viewers are looking for a one-stop source for programing and will also
explore web-exclusive content.
Analysis of Methods
The nature of our research instrument limited the type of responses we could
receive. We decided to use an online survey that restricted respondents’ replies to
predetermined answers. Survey takers were free to take the survey on their own time.
We were not available to assist them while they filled it out. We anticipated that this
would lead to mislead answers based on misunderstanding questions.
Small, volunteer based, focus groups may have alleviated some of these concerns.
Survey creators would have been available to explain questions or concepts in the survey
that may not be clear to respondents. Discussion and discourse based on online
television in these groups would have provided more insight on what programs, if any,
respondents watch online and in what formats.
There were some internal validity issues that were present. For instance, our
sample selection was skewed towards younger demographics. As previously stated, the
ages ranged from 16 to 69. With that said, over half of our respondents were between
the ages of 18-24. There was a precipitous drop in the number of respondents 27 and
older. As such, drawing accurate conclusions regarding age became difficult.
10The ratings for the series are currently not disclosed by hulu.com, but the show has generated
considerable press coverage

Problems with history were also noticeable. Hulu.com was the favorite online
television website among respondents. At the time the survey was administered,
hulu.com had the largest library of online programming. In addition, the survey was
administered shortly after 30 Rock had their exclusive season premiere on hulu.com.
These factors may have had a strong influence on the survey taker’s answers. Likewise,
there is no telling that the other major networks will not have exclusive premieres and
increased content on their websites in the future. Such factors could compromise
hulu.com’s popularity.
The study’s external validity problems call for some criticism. A pilot test was
used in order to refine the survey. This process proved to be advantageous, providing
insight into revisions and additions necessary. However, the survey was only
administered one time and over a relatively short duration. These shortcomings were
largely due to time and budget restraints.
One key issue with regards to replication would be when, in the future, a similar
study should be run. Online TV is growing in popularity as access to broadband
networks increases nationwide. Networks are increasingly using online TV as a means
to promote their shows. Such was especially true in the Fall 2008 season, as NBC
premiered the new season of 30 Rock on hulu.com. Ergo, surveys such as this one are
most effective during parts of the year with high primetime viewership: namely the fall
season and sweeps. A revised version of this study could serve as a model to track
viewing behaviors at key parts of the season.
Unfortunately, the study could not use a representative sample. Going with a
volunteer sample in a university setting contributed to the young, mostly college age,
respondents. Moreover, the sample population was rather homogeneous. This was

anticipated since, as previously mentioned, the survey took place at a university. The
high student response to the survey served as the root to the respondent population’s
homogeneity issue. Furthermore, most of the respondents were female. This major
discrepancy between sexes may have influenced the types of sites and services
respondents claimed to use.
Conclusion
In addition to the hypotheses tested, 4 conclusions have been made regarding
online TV: 1) online TV is popular and is increasing, 2) people are willing to pay to
download familiar content, 3) quantity and variety of content available online are key,
and 4) the Internet can be a primary source for programs.
1. Online TV is Popular and Use is Increasing
While traditional TV still dominates, the majority of respondents had used an ad-
supported site. A smaller, but significant, number had used a pay-to-download service.
Furthermore, people were willing to explore ad-supported sites for unfamiliar content.
Therefore, the researchers conclude that online TV can only continue to grow.
2. People are Willing to Pay for Familiar Content
The researchers have inferred that people are willing to pay for familiar content.
Because a sizable number have used a pay-to-download site, but the majority will not
use such a site for unfamiliar programs, pay-to-download seems like a viable option for
older and more popular programs. Furthermore, the relatively low cost of providing
shows through a pay-to-download service, coupled with the increasing ease of watching

such shows on a variety of devices means that the medium has potential to realize
greater profits. Therefore, the researchers suggest that networks make their new
content available for free on ad-supported sites and then moving it to pay-to-download
sites. Additionally, more research should be done regarding people’s preference to own
a television program.
3. Quantity and Variety Matters
The majority of respondents reported that they were only “sometimes” able to
find a program online. Furthermore, hulu.com (the site with the largest and most
diverse library) was the most popular among the respondents. Therefore, the
researchers suggest that content providers make as much and as diverse a range of
programming available as possible.
4. The Internet Can Be a Primary Distribution Medium
The relative popularity of hulu.com coupled with their release of the celebrity-
generated, web-exclusive “Dr. Horrible’s Sing-Along Blog” allows the researchers to
infer that the Internet can be successfully used as a primary distribution medium.
Furthermore, the increasing ease of integrating the Internet with the television set
means that more viewers will be able to access such content without the restraints of the
computer desk. With regards to the potential for market-clutter, the researchers suggest
that innovative programs be created by the networks and distributed on the Internet,
before they are broadcast.

Works Cited
“Business: What's on next; The future of television.” The Economist 10 Feb. 2007: 74-
74.
Comor, E. “Household Consumption on the Internet: Income, Time and Institutional

Contradictions.” Journal of Economic Issues, Vol. 34, No. 1 (Mar., 2000) p. 111.
DiMaggio, Hargittai, Neuman, Robinson, Social Implications of the Internet, Annual

Review of Sociology, Vol. 27, 2001, p308.
Gower, Leigh. "Rocky Road Ahead for Internet TV." Revolution (2007): 44-46.
MacInnis, D., Moorman, C., Jaworski, B. “Enhancing and Measuring Consumers’

Motivation, Opportunity, and Ability to Process Brand Information from Ads.”
The Journal of Marketing, Vol. 55, No. 4 (Oct., 1991) p. 34.
Morrissey, B. “Study: TV Spots Work Better Online.” Adweek (March 26, 2007), p. 12.
Stern, B. “A Revised Communication Model for Advertising: Multiple Dimensions of the

Source, the Message, and the Recipient.” Journal of Advertising, Vol. 23, No. 2
(Jun., 1994) p. 13.

Final Paper (BEA Version)

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Trends in Online TV

Who’s Watching and Who’s Paying

Submitted to: Broadcast Education Association

A/V Requirements: Computer, Projector

Sam Cadet scadet1@gmail.com 973-493-6323

supported websites (such as hulu.com) and pay-to-download services (such as iTunes).

Three hypotheses were tested:

H3: Online TV is used primarily to catch up with already-familiar

H1 was partially supported, partially refuted; H2 was refuted; H3 was partially

• Ad-supported sites were preferred over pay-to-download sites

November 9 and November 21, 2008. A 27-question, volunteer survey was

administered via http://freeonlinesurveys.com. 270 people responded with the

majority being college-educated, young females.

-December 5, 2008- Cadet, Shafiei, Twyne and Zhang

Introduction and Literature Review

is growing. According to a recently released Nielsen Media Research study

included a rise in people viewing their television programming online, according to

for how best to increase viewership.

-December 5, 2008- Cadet, Shafiei, Twyne and Zhang

innovative content as well versus sites devoted to a single network’s programming.

In reviewing current literature relating to our study, we were influenced by a few

medium’s diffusion and institutionalization, 2) the Internet is unique because it

than guesswork (DiMaggio, Hargittai, Neuman, Robinson, Social Implications of the

the online television viewer.

Network programming has been influenced by the growing popularity of online

-December 5, 2008- Cadet, Shafiei, Twyne and Zhang

before it premiered on network television. Our study sought to determine if viewers

Telecommunications and Information Administration (NTIA 1995, 1998, 1999, 2000)

showed “documented differences in Internet access favoring the college educated

(DiMaggio, Hargittai, Neuman, Robinson, Social Implications of the Internet, Annual

differences in our study.

games [e.g. multi-user dungeons or MUDs (Turkle 1995)] (DiMaggio, Hargittai,

Neuman, Robinson, Social Implications of the Internet, Annual Review of Sociology,

2) testing the potential of pay-to-download to draw an audience. We feel that these

were concerned or overly annoyed by the advertising presented during programming.

-December 5, 2008- Cadet, Shafiei, Twyne and Zhang

important construct in consumer decision models (Bettman, 1979), interruptions have

unobtrusively measuring consumer reactions to interruptions (Xia, L. and D.

Sudharshan, Effects of Interruptions on Consumer Online Decision Process, Journal of

study the impact of advertising interruptions on consumers’ enjoyment of the program

interruption frequency. Because of the variance in ad frequencies and lengths on various

sites, we decided to instead measure perceptions of the interruption. Our hypothesis is

attempting to fulfill a leisure-related goal, this goal is abstract.

Internet as a kind of high-tech interactive television system (Comor, E., Household

Consumption on the Internet: Income, Time and Institutional Contradictions, Journal

-December 5, 2008- Cadet, Shafiei, Twyne and Zhang

savviness to use of online TV.

Our study set out to test 3 hypotheses:

H3: Online TV is used primarily to catch up with already-familiar

A volunteer survey was administered via http://freeonlinesurveys.com. Prior to

-December 5, 2008- Cadet, Shafiei, Twyne and Zhang

Data Transformations and Manipulations

used (see Figure 2).

Figure 1: Age Data [As Entered]

-December 5, 2008- Cadet, Shafiei, Twyne and Zhang

Figure 2: Age Groups for Recoding

meaningful relationships to be ascertained).

such, this data was recoded as follows:

Figure 3: Recoded Education Values

Original Response Recoded Value

-December 5, 2008- Cadet, Shafiei, Twyne and Zhang

Feelings Towards Advertisements