The idea stated with ABC and Apple, to offer re-runs, sans commercials, of television shows online. A nice idea, as Apple of course has a player and a proprietary DRM already with a fancy cyber store to display the goods. So in the six months since the down-loadable television show debuted, networks are thinking of offering everything from individual programs to season subscriptions.
As can be expected, hawking ad free shows for $1.99 a pop with Apple, does little financially for a major networks bottom line, even if they sell in the millions. So why all the interest? Analysts have determined that there is little choice and that television must embrace technologies that allows viewers the freedom to watch what they want when they want and with other devices aside from the "boob tube" like the iPod. Studios may also wish to offer a legal alternative to the bustling P2P Internet trade networks as well and are even toying with the idea of free downloads with an advertisement thrown in.
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"The problem is nobody really knows what the new business model should be yet," he said. In its deal with Apple Computer Inc. (AAPL)'s online media store iTunes, The Walt Disney Co. has sold programs from its ABC and ESPN networks and the Disney channel for $1.99 each. Revenue from those sales has been minuscule compared with advertising sales for television. But networks and producers can afford to experiment because it costs little to sell video online, and the profit margin is high because revenue isn't shared with local stations - at least not yet. Unions representing actors and writers also are seeking a bigger cut of online revenue, which could cut studio profits or result in higher prices for consumers. "If you want to make money from television, you have to find something a million people want to watch," said Josh Bernoff, principal analyst for Forrester Research. "If you want to make money on the Internet, maybe all you need is thousands or even hundreds." |
ABC was quoted in the article saying that they have learned "important lessons" already when it comes to online content. They say it does not hurt the TV ratings at all! In fact, they are even beginning to think that these downloads could be used as promotions for the shows, not just revenue enhancing models.
Source: MyWay AP News
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