According to research company Parks Associates, the number of broadband households that pay for online video is about 12 million. That’s up dramatically from 2005 to 2006 when there were about 3 million.

It looks like this 300% growth in paid video content is the result of a) having video content available and b) having good content. The growth of paid video sites like iTunes, Amazon and even NetFlix is what’s driving this. Consumers want brand-name TV and movie entertainment that they can rent or buy and take to their portable devices, or TV screens.

Parks said that the market for online video is still in flux: “With issues surrounding content rights, the role of incumbent video providers, business models, and questions about how consumer electronics manufacturers and other service providers will actually succeed, the space is very fluid at this point.”

Case in point: Apple’s iTunes and how NBC Universal decided to take their content to their own Hulu.com and even Amazon.

Another interesting development is the adult entertainment market which could very well be a huge factor in paid video content. I don’t know whether Parks Associates is looking at this market, however, but it’s definitely where a lot of technological innovation happens.

According to TechCrunch, Hulu acquired Mojiti, a Beijing-based company for an undisclosed sum. This deal is so secret that it “may have originally leaked via an overheard airport conversation”, says TechCrunch. Wow, guess people should be more discreet in any public place. And kudos to the person who overheard this deal, too.

Says Michael Arrington at TechCrunch:

“Mojiti is a basic online video platform that also allows users to annotate videos at specific time points. The annotation feature is somewhat similar to another startup, click.tv, which is rumored to have been acquired by Cisco.”

Apparently, Mojiti is also similar to a company called Viddler, which lets viewers add comments and tag videos while they watch.

Personally, tagging videos doesn’t seem like the next killer app. When I heard about the ability to tag videos, I just shrugged my shoulders. There’s got to be something good you can do with it, but the most I can think of is to make fun of people, like Mystery Science Theater 3000 skewered bad movies.

Or even worse, insulting people. I wonder what kinds of controls there will be on these services. I tried to annotate a video on Viddler, but I was told I had to log-in for it to be saved in the video. Guess that’s a great way to get people to register for your site and grab them.

These video annotations also reminds me of VH1’s Pop-Up Videos, which was great because they had interesting factoids and funny quips about the videos they played. I just hope taggers are as funny and interesting as MST3K and Pop-Up Videos.

A story from the AP called “New Web sites aim for TV experience” gives a rundown of some of the major companies looking to compete with TV. It’s a pretty basic article targeted at those who are new to Internet video, but I just wanted to pull out some tidbits. Like slogans of three new companies, Joost, Babelgum and Veoh:

• Joost: “The new way of watching TV”
• Babelgum: “TV experience, Internet substance.”
• Veoh: “VeohTV makes watching Internet as simple as watching television”

The article talks about how people are not ready to watch long-form video online. But it fails to note the “lean forward” aspect of watching TV over the Internet. That’s why PCs are better suited for short form video.

And people are getting accustomed to interacting with their computers differently, like doing work or checking e-mail. Watching videos isn’t something people sit down in front of their computers and expect to do for two hours.

Another good tidbit:

A poll conducted last September by The Associated Press and Time Warner Inc.’s AOL found that only one in five online video viewers have watched or downloaded a full-length movie or TV show.

Yesterday, NBC Universal unveiled its online video venture with News Corp., called Hulu.com. It got lots of press everywhere and they’re even keynoting the next Streaming Media show. Today, NBC Universal said it was pulling its video content from iTunes so they can put it into Hulu instead.

Today’s New York Times said that NBC Universal wants more control over pricing and packaging of its TV content. From the Times:

“The media conglomerate — which is the No. 1 supplier of digital video to Apple’s online store, accounting for about 40 percent of downloads — notified Apple of its decision late yesterday, according to a person familiar with the matter who asked for anonymity because negotiations between the companies are confidential”

I’m sure all the other iTunes content providers would like a better deal too. In July, Universal Music Group said it was pulling most of its music out of iTunes and just allowing certain content for sale. Does that mean that there will be a mass exodus from iTunes now? The New York Times says that talks between Apple and NBC Universal are still ongoing. Over at All Things Digital, they say NBC may be just playing hardball.

But I still have questions about Hulu. Will it be a free ad-supported, user-generated site like YouTube? Or is it going after the more mature “pay for play” iTunes market? 

Not much is known, so it’s wait and see about Hulu.

Technorati Tags: Hulu, NBC, YouTube, iTunes, Apple, NBC Universal

IBM released results of a survey into the habits of consumers around the world and found that people are using the Internet more and watching less TV. Nineteen percent said they spend 6 hours or more per day using the Internet versus 9% who spent the same time watching TV.

The survey looked at other digital media usage, inculding mobile TV, online video, music and DVRs.  (I’ll be posting data on DVRs over at my sister blog, DVR Bulletin soon.) Some data highlights:

• 66 percent reported viewing between one to four hours of TV per day, versus 60 percent who reported the same levels of personal Internet usage.
• 81 percent of consumers said they’ve watched or want to watch PC video
• 42 percent said they’ve watched or want to watch mobile video
• 23 percent reported using a portable music service
• 7 percent reported having a video content subscription for their mobile phones
• 11 percent reported subscribing to a PC-based music service
• 18 percent reported an online newspaper subscription

People are increasingly turning to the Internet, where they have a variety of media, such as music, photos, movies and games and watching less TV. Among young consumers, TV is taking a back seat, said Saul Berman, IBM Media & Entertainment Strategy and Change practice leader.

“Just as the ‘Kool Kids’ and ‘Gadgetiers’* have replaced traditional land-lines with mobile communications, cable and satellite TV subscriptions risk a similar fate of being replaced as the primary source of content access.”

In Germany, users that have watched mobile video, 23 percent prefer to view user generated content, and 21 percent prefer video trailers or promotions.

Overall, nothing most of us don’t already know, but it’s nice to have the numbers to back it up and put in our PowerPoint slides and business plans.

* Marketers love to invent ridiculous words like “Gadgetiers” and “Kool Kids” to describe various groups, much like people use “Millenials”, “Generation X” and “Generation Y” to describe certain demographic segments. IBM says “Gadgetiers” are drawn to the latest devices and are interested in participating and controlling the time and place of their media experiences; while “Kool Kids” prefer interactive content and rely heavily on content sharing and social interaction. Enough fine print.

[Via Monsters and Critics and NewTeevee]

Bonus: Here’s a direct link to the IBM study on U.S. consumers. There are also individual reports for the U.K., Japan, Germany and Australia.

Bonus #2. IBM walked around the street with a video camera and asked kids whether they prefer TV or the Internet and the results won’t surprise you.

Technorati Tags: IBM, research, YouTube, online music, mobile TV, mobile video, Internet video