Bain sees TV time growing faster than Web

By Michele Gershberg

NEW YORK (Reuters) - Time spent watching television will rise faster than leisure time spent on the Web through 2012, while a major audience for Internet video could take even longer to develop, consultancy Bain & Co said on Thursday.

According to data exclusively released by Bain at the Reuters Media Summit in New York, U.S. viewers on average will spend nearly two more hours per week watching television by 2012, fueled by growth in video-on-demand choices and the use of digital video recorders.

In that same time frame, Internet use outside of the office is expected to rise by less than half an hour per week.

The data could be sobering to TV networks and Web media companies, which are investing heavily in Internet video sites and testing ways to make money off them through advertising.

David Sanderson, head of Bain's global media practice, said the prospect for Internet video to become a viable alternative to the broadcast, cable or satellite signals into viewer's homes could take five years or more to materialize.

"There are capacity constraints, the technology isn't quite there ... and frankly the business models for the content owners, all of that still needs to be worked out," Sanderson said at the Summit.

"Until that's worked out and until the Internet can deliver that same experience, then it's still going to be delivered over the traditional multichannel video providers," he said.

Sanderson noted that uptake of video services provided by telecoms companies, such as AT&T Inc's (T.N: Quote, Profile, Research, Stock Buzz) U-verse or Verizon Communications Inc's (VZ.N: Quote, Profile, Research, Stock Buzz) FiOS, and further growth in the market for high-definition, flat screen television show that the traditional TV market should remain durable.  Continued...