Networks enter brave new world beyond TV sets
Not long ago, executives at the major television networks were skittish about any new technology that could deliver programming any way other than through a TV set sitting in the average American home.
But faced with changing viewership and lifestyle patterns, particularly among younger Americans, the networks are finally facing a future of making their entertainment and news available online, via cell phone, through digital recording systems and video on demand and now as downloads on Apple's new video iPod.
Apple Computer and Walt Disney announced Wednesday that the new iPod would offer episodes of ABC's biggest hits, ``Desperate Housewives'' and ``Lost,'' as well as the new ``Night Stalker'' the day after they air. The episodes, along with installments of the Disney Channel's ``That's So Raven'' and ``The Suite Life of Zack & Cody,'' would cost $1.99 to download and could be played on the iPod's 2 1/2-inch screen, a computer or even on a standard TV.
While the Apple-Disney deal caught executives at other networks somewhat by surprise, the idea that one of the networks would take the leap was hardly a shock. In fact, the networks have already been dipping their corporate toes into the waters of new technology,
UPN recently streamed an episode of its new hit, ``Everybody Hates Chris,'' on Google. The WB offered the opening episode of ``Supernatural'' on Yahoo before the series premiered in September; Showtime did the same with its new series, ``Fat Actress.'' The Sci Fi cable channel has offered complete installments of ``Battlestar Galactica'' on its own Web site. And ABC News has a deal with Verizon Wireless to deliver news report via cell phones.
But the Apple announcement is likely to accelerate other networks' tentative plans to make their shows available on multiple platforms -- even if the ultimate financial success of delivering TV through those technologies is still in considerable doubt.
``We've been talking and are still talking about new platforms of all sorts,'' said CBS senior vice president Dana McClintock, who pointed out that the network already makes the audio portion of some of its shows available for download through Apple's iTunes.
David Poltrack, the network's executive vice president of research and one of the biggest advocates for multiple platforms, said that ``if we are going to sell our product, we want it in as many stores as possible.''
Poltrack has already done significant research on the willingness of American TV viewers to pay for episodes of their favorite series they may have missed or would like to see again. (The studies were done in the context of video-on-demand, not the new video iPod.)
One survey with 2,500 respondents found that almost 20 percent would ``definitely'' be willing to pay $1 to buy an episode without commercials. A majority said they would be ``somewhat likely'' to use such a service at some point.
That kind of response, Poltrack projects, could result in an initial annual revenue of $5 billion for the networks.
But more than a few experts in the field point out that those kinds of projections may just be as shaky as the predictions of great and quick success for TiVo and other digital recording systems, which have yet to reach more than 5 percent of American households. Or for that matter, the limited success so far of the pay segment of video-on-demand.
Bruce Leichtman, chief analyst with the Leichtman Research Group, noted recently in MediaWeek that video-on-demand ``has grown through delivering free programming. Consumers have not necessarily shown a willingness to pay for programs.''
And when asked about the new video iPod on Wednesday, several avid TV viewers who are what marketing experts like to describe as ``early adapters'' to new technology expressed some hesitation about immediately jumping on the Apple bandwagon.
``It's cool, without question,'' said Paul Consolli, a 30-year-old marketing manager, in an e-mail interview. ``But I've already got TiVo and I've got a VCR I can use. I just don't know if I need another system where I have to pay for an hour of `Lost.' ''