Video Sites Benefiting From Broadband Boom

The rate of broadband adoption in the U.S. may be slowing, but sites like YouTube, MSN Video and Google Video are seeing dramatic traffic increases, according to new research from Nielsen//NetRatings.

The growth could be a boon to ad-supported sites, as advertisers increasingly look for available video inventory. It could also boost multi-channel campaigns that use TV or print to drive action online.

The company found MSN Video to be tops among video sites traffic-wise, attracting 9.3 million unique users in February, up 44 percent over the same period a year before. But YouTube, which wasn’t even on the charts a year ago, was close behind, with 9 million unique users. Another new player, Google Video, came in third with 6.2 million uniques, while iFILM grew 102 percent over the course of the year to 4.3 million unique users. The site with the lowest traffic, but with significant momentum, was Yahoo Video Search, which drew only 3.8 million unique users but grew 148 percent from the year-ago month.

“YouTube has really seemed to come out of nowhere,” said Jon Gibs, senior director of media at Nielsen//NetRatings. Gibs noted that one important question in these sites’ future is the extent to which they can cooperate with television networks, given the varying reactions from networks thus far. “I just have to feel that it’s incredibly shortsighted on the networks’ part to prevent short-form content to be placed on these services,” he said. “I can’t see how it could cannibalize the TV programming itself, and all it could be is beneficial.”

Word of the booming growth in online video content comes as two-thirds, or 68 percent, of the U.S. Internet population has adopted broadband, according to Nielsen//NetRatings. That February figure represents a 28 percent year-over-year growth rate and an all-time high. Time spent online per Internet user was also at an all-time high, at 30 hours and 35 minutes a week. Last year, Internet users on average spent only 27 hours and 49 minutes online.

Having reached such a high point, however, the growth rate is slowing, according to Gibs. Part of the reason is that providers’ discounts have been effective in bringing price-sensitive people to broadband, and the remaining audience just isn’t interested. “That level of low hanging fruit has been picked up by the industry,” he said.

Gibs said the high-speed access offered by broadband service isn’t proving to be as important to consumer behavior as the persistent, always-on connection. This feature is also being tapped by marketers, Gibs said, noting Pontiac’s recent TV campaign that urged viewers to “Google Pontiac.”

“Someone can take that immediate action,” he said. “They don’t have to double click on the dial-up icon. You can just walk over to the computer, where you may already have Google up or Google toolbar up. Broadband makes that seamless action possible whereas you had an interrupted flow before.”