Peter Kafka

Recent Posts by Peter Kafka

If This Is Age of Web Video, Who’s Buying All Those TVs?

Pundits keep telling us that the Web generation is happy to watch TV on a laptop. So who keeps buying all those TV sets?

Check out this chart from Nielsen (click to enlarge), which tells us that the average American household has nearly three televisions. In 1990, the average was two sets per home.

What gives? Mark Cuban, who has been consistently bearish on Web video–except for the part where he convinced Yahoo (YHOO) to buy for billions–says the answer is easy: “Consumers have made their choice to spend money on new HDTVs. Why? Because they want to watch TV.

And it’s probably good to remind the early-adopter set–like people who read this site–that sating all your video needs with computers and “over the top” solutions is going to be a niche behavior for a long time.

But! There is a cake-and-eat-it answer here too: It’s perfectly reasonable to assume that most people will watch TV on their HDTVs. And then, when it makes sense, they’ll watch some video delivered over the Web on those same sets.

That’s already happening in real numbers. Netflix (NFLX) says nearly eight million people are watching TV and movies via its streaming video service, and not all of them are watching on small screens.

Nintendo, for instance, says one million of its customers are using the Netflix service. And by definition, none of them are watching on a PC or laptop; if you’re using a Nintendo Wii, you’re using a TV.

These numbers will increase as more Americans walk out of Best Buy (BBY) and Walmart (WMT) with an Internet-connected TV, whether they planned to buy one or not.

Over the next few years, it will become increasingly hard to buy a set that doesn’t have an ethernet connection, just as you have to go out of your way today not to buy an HD set. And that’s when things are going to get really interesting.

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald