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Watching TV online can be smart financial move

Millions are enjoying their favorite programs, saving serious money by using the Internet

06/02/2011 9:15 PM

06/03/2011 6:39 AM

If you missed the season finale of Glee, Biggest Loser or American Idol last week because of the local weather interruptions during the storm, you don't need to wait for a rerun. You can turn to the Internet.

Watching TV online may also save you some serious money if you're ready to drop your paid television service.

My husband recently hooked up an old computer to our flat-screen television, and with a wireless Internet router already in place, my daughter and I watched the final Glee episode simply by calling it up on Fox.com.

In the same way, the finales of Loser and Idol are at NBC.com and AmericanIdol.com, respectively. The latter comes with a 360-degree camera angle that lets you select your view with a click and drag of your mouse.

Turns out that millions of viewers are doing what we are. A recent study showed that 30 percent of all households have at least one television connected to the Internet, up from 24 percent last year, according to Leichtman Research Group in Durham, N.H.

Moreover, 10 percent of adults watch Internet video at least weekly through a video game system, Blu-ray player or the TV set itself, according to the study.

"The use of emerging video services rapidly increased over the past year, with Netflix being the key driver of this growth," Bruce Leichtman, the firm's president, said in a news release.

Netflix added an Internet stream of television shows and movies for customers with an Xbox 360 starting in 2008. By the end of 2010, the company reported that customers were watching more content streamed over the Internet than on discs delivered by mail. They are using a myriad of devices, including video game players, personal computers and Internet-ready TVs. Netflix now offers a streaming-only subscription for $7.99 a month.

Today, Netflix's Internet content ranges from all the seasons of old classics like The Twilight Zone to the most recent Saturday Night Live, available the day after it airs. Netflix just signed an agreement with Lionsgate to air previous seasons of Mad Men and new episodes once the season has been broadcast on AMC.

And Netflix is now the largest pay TV operator in the country, beating out Comcast. According to first-quarter reports, Netflix had 22.80 million customers in March, while Comcast had 22.76 million.

The major downside to online television programming is that you have to wait at least a few hours or even an entire season for access to a series or episode. But with digital video recorders -- now in one-third of U.S. households -- watching a program on normal TV schedules is becoming less important.

A consumer could save a significant amount of money by combining the numerous free over-the-air channels in D-FW and a cheap or even free service like Hulu.com to provide shows on demand. Cable and satellite services average $71 a month and can run much higher, according to Centris, a research firm based in Fort Washington, Penn.

Still, consumers are generally not dropping paid television service for Internet services, Leichtman says.

"Even with this growth in emerging video services, this isn't creating a significant trend in consumers cutting the cord to multichannel video services, including cable, satellite, and telco video services" like Verizon's Fios, he said. "Despite a highly saturated market, coupled with slow housing growth, the multi-channel video market in the U.S. still grew by over 500,000 subscribers in 2010."

Hulu.com is a popular site where consumers can watch an abundance of TV programs at little or no cost. In addition to classics like Alfred Hitchcock Presents and Buffy the Vampire Slayer, Hulu offers current primetime shows like 30 Rock, The Office and Modern Family.

Hulu also offers a $7.99 monthly subscription for access to other current and back season shows from ABC, Comedy Central, FOX, NBC and MTV.

Professional sports are getting into the Internet viewing game. Season passes for every major league baseball game can be viewed live through streaming video or on demand at MLB.com for $19.99 a month or $79.99 for the season. The NBA and NHL have similar offers. The NFL is more controlling with its online content and does not yet offer games for viewing online in the U.S.

TV news shows are also streamed online either live or after broadcast. CNN shows, network news and local TV news broadcasts are available for free on their websites.

While TV makers including LG, Panasonic, Sony and Samsung offer sets with Internet capability, you can also connect an older TV to the Internet.

For example, Apple offers Apple TV ($99), small enough to hold in your hand. Apple also offers its own source for programming, including TV shows for 99 cents (commercial-free) and high-definition movies rentals for $3.99. Roku has a similar product and price for a handheld streaming player.

Before hooking up a computer to your TV, be sure your computer can handle online streaming, which means a good video card and high processing power. Hulu recommends a Flash 10.0.32-enabled computer. A lower-level computer would have more image quality issues when hooked up to a high-definition TV.

Also, the speed of your Internet connection will affect viewing quality. Glee was a little choppy over the Internet from Fox.com, and during the commercial breaks it went to more of a computer desktop look and had to be manually formatted back to widescreen each time. We have watched Netflix movies and TV shows downloaded from the Internet with no image problems.

No one knows what the Internet/TV mashup is going to ultimately look like for consumers. But it's a trend worth watching and at the very least should put pricing pressure on paid television service. If they don't watch out, they could get dropped for these online competitors.

Teresa McUsic's column appears Fridays.

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