According to Nielsen’s Broadcast Season Universe Estimates, the number of television households in the US has grown from 111.4 million in 2007 to an estimated of $114.9 million by the end of 2010. The fact is that more people watching television than ever before.

Of course the growth of online video views has been explosive. According to July data from comScore, 178 million U.S. Internet users viewed online video content during the month and averaged 14.7 hours per viewer.

Content is still king when it comes to this convergence. The biggest difference is that much of what is being viewed is user generated content. YouTube has millions of channels, some with high production quality and with very low production quality. The millions of views generated by low budget content may surprise some. The one channel that comes to mind is Fred (aka Fred Figglehorn). This kid has been on YouTube for years. He gets millions of views for every video that he puts out and monetizes these views through the YouTube partnership program. I believe he’s now making a movie for Nickelodeon. We have already seen TV show start to increase distribution of content through sites like Hulu. You will start to a significant increase in web based user generated content being formatted and produced for TV.  Fred’s TV movie and shows TV shows like Web soup are just the beginning.

From a business perspective it just makes sense. If your self produced show/videos generate million of views online while drawing a certain demographic, then the TV folks already have an audience.

One of the advantages that web video has over TV is all of the real time metrics/interaction that can be tracked with advertisements.  There are several companies that are developing the same type of tracking capabilities for TV.

I’ m writing this blog entry while looking at my 32inch Apple monitor. I still prefer my 42 inch plasma for TV.  The biggest part of this E-volution will be when I’m writing my blog entry on the same screen that I watch the NFL.  In other words when TV/web surfers start using the same monitor for both that will be the biggest difference.

If you have any doubts about this convergence just think back the 1990′s. Remember dial up? Remember trying to watch a video using dial up? The very fastest modem at that time was 56kb. You often would have to wait at 20 to 30 minutes for a video to download. Things have changed at a rapid pace and unless of course the Mayan Calendar is correct, I have no doubt this convergence will happen in a big way.

So, your co-worker coaxes you to watch the trailer for Twilight when you came in for work this morning and it convinced you to be Team Edward all the way. Well, you’ll probably see the preview again in the theater a couple of times and wonder all along why you weren’t Team Jacob in the first place?  Regardless, you’ve seen the trailer twice as many times as you would’ve seen it ten years ago and you’ve invited all your friends to the midnight showing – now that’s how advertising works!

It’s almost impossible to go about your day online and not see an advertisement for an upcoming feature film.  The ad may be a banner across your e-mail server, or a pop up ad on your favorite news page.  It may even be free ticket dancing across your screen or a contest that entices you to check out the trailer.  What ever it is – online advertising for movies has become more and more aggressive since the first preview showed up on our laptops.

Take the movie Paranormal Activity.  This film was made for a dime in 2007 and sat on the shelves at Paramount for two years.  Needing to close out its fiscal year with a bang,  Paramount dusted off a copy and brought in the ad wizards.  With few dollars for marketing, a specific approach was taken: the movie would NOT carry a wide release unless 1 million votes were received on their official website, trailer included of course. And even though the indie hit was slowly making money already, the online approach to getting this film out and about was simply genius.  Once people heard about the scary flick on sites like Twitter who aggressively helped pushed the outcome by telling folks to “tweet the scream.”  People everywhere logged on to the site, watched the preview and made their choice.  When someone tells me I can’t watch a film – you better believe I will see it. And for online ad companies, this was a unique way to track what sites people were surfing, what advertisements linked them to the film’s website, how many people participated and how financially effective the campaign was. To date, Paranormal Activity has grossed $183 million worldwide so, you tell me.

Wikipedia claims that ten billion online videos including movie trailers are watched annually; while previews at movie theaters trail this number by thousands. Over 15 million people viewed the trailer for Paranormal Activity on YouTube, and that’s how online advertising has proved to be changing the film industry one click at a time.