Last updated: August 15, 2011 - 8:27am
Media companies are starting to cash in on Internet video. But that new money could be coming at a cost as fewer young people watch traditional television.
That battle between the old and new ways of watching TV is putting networks and studios in a tricky position -- balancing a new, growing online market for shows with a traditional market that is facing new threats and still accounts for the lion's share of revenues. Declines among younger viewers accelerated this TV season -- a shift in an industry that has registered growth for decades. At any given time of day, about 11.5 million people between 18 and 34 years old watched TV on traditional sets between last September and the end of last month, down 2% from a year earlier and 3.4% from two seasons ago, according to Nielsen Co. Networks are able to charge advertisers a premium for viewers in the age group, which also is a barometer for future viewing habits. New digital-streaming deals with companies like Netflix Inc. meanwhile pumped hundreds of millions of dollars into big media companies this spring, and media executives say they are teeing up more such deals.
The changes come as a war brews over which companies will profit by piping video to consumers. Netflix, Amazon and Google and other technology companies are muscling into living rooms with new ways to watch video. Cable operators and other traditional distributors are fighting back, rushing to give their subscribers access to shows on such new devices as tablets and Internet-connected TV sets -- and trying to restrict the amount of free TV available on the Web.
Whether that war is already taking a toll is subject to debate.
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