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Online video is growing in popularity, but the vast majority isn’t getting anywhere near your TV screen.A survey conducted during December 2007 by Macrovision (commissioned by Harris Interactive) says that only a small number of adults who download video from the Internet play it on a TV or DVD player.

Specifically, the survey of 2,254 adults in the U.S. found:

1. 43 percent download some form of digital media
2. Over a quarter said that they download TV shows regularly
3. 15 percent download full-length movies
4. More than half said that they only watch the downloads on their PC
5 ONLY five percent said that they watch video on a TV or other video-playing device

No surprise here - most content providers use some form of Digital Rights Management (DRM) in such a way that it makes watching video anywhere other than the PC inconvenient, if not downright impossible. For example, video from sites like Hulu can only be watched through a browser, so the only way to watch it on a TV would be to use a computer connected to it (something that the majority of users don’t have).

While downloads from NBC Direct may not be limited to the web, they can still only be played on a single authorized computer at a time.Downloading from places like the iTunes Store or Xbox Live Video to the Apple TV or an Xbox 360 make this possible without having to use an HTPC. Still, even though these solutions make it easier to watch downloaded content on the big and small screens near you, they clearly have yet to hit it big with the general public.

Only five percent of those surveyed said that they watch video on a TV or other video-playing device regularly.In fact, while conventional wisdom says that users would love to watch downloaded video content on the television set, Macrovision found that only 10 percent of those surveyed said that they have any desire to do so. The company was surprised to learn this: “While people very quickly figured out the music scenario—either legally or illegally—they haven’t figured that out for video,” observes Macrovision chief evangelist Richard Bullwinkle.

As online video continues to expand, content providers will have to face the consequences of their own restrictions on how viewers use content. Making it easier to transfer files to portable devices and set-top boxes will help drive viewership.One way to do that is by mimicking the Peer-to-Peer (P2P) experiments by Canadian, Norwegian, and other European broadcasters, who offer completely restriction-free downloads. That might be a bit too much for most U.S. networks to swallow now. On the other hand, if they don’t drop DRM and embrace alternatives soon, they will continue to lose viewers to free-for-all video sharing sites like YouTube/Google, AOL, Yahoo, MSN Video as well as other, less-legitimate ways of acquiring video content.