Nov 082005

Dunes Death Valley ©Gary Hayes 2005Who would have thought it? After many years of rampant piracy of TV programmes and films the networks and content holders are starting to fight back. Who would have imagined such a scenario? So it comes as no surprise that CBS and NBC are moving to sell their prime time shows on demand for as little as 99c. Before we look at their models I often think when I see these reports, of an expression a friend in Santa Barbara, Patrick Gregston, used at a Super Distribution conference I produced earlier in the year

“the mountain top is gonna shrink and the foothills are gonna explode but we are pretty sure that those people that are on the mountain top are gonna buy all the best foothills too”

The sort of quote you come out with when you live in glorious Santa Barbara but extremely relevant as the mighty NBC starts to offer Battlestar Galactica (amongst others) for 99c for a week after it airs. As the business wire report points out today:

The way people are consuming content is changing,” said David Zaslav, President, NBC Universal Cable. “Through this agreement with DIRECTV, consumers will be able to watch top NBC content on demand for just $0.99, when they want, without commercials. It’s a huge sea change. This deal is the first of its kind and we value DIRECTV’s partnership in rolling it out.

So the new 100 hour NDS based Personal Video Recorder about to be unleashed on an unsuspecting West Coast USA public through DirecTV will act as a way to distribute these programmes – kind of thinking why wouldn’t they just ask the PVR to capture them on transmission – probably missing something here 😉 Given the use of Sky+ box office in the UK and IQ in Australia the jury is out on how sucessful a ‘order for later model’ will work, but selling the crown jewels this way may prove a winner.

The other giant of US broadcasting entering the fray is CBS who have teamed up with Comcast Cable to offer in January the same 99c model of watch major prime time programmes like CSI and Survivor when they want. The article from PR Newswire quotes:

“Video on demand has fundamentally changed the way people watch TV, and now for the first time the most popular prime-time CBS programming will be available to our customers,” said Brian Roberts, Chairman and CEO of Comcast Corporation. “CBS has taken a giant step forward in experimenting with prime-time video on demand. Comcast’s ON DEMAND service has been tremendously successful, with more than one billion program views so far this year.”

OK Pay-Per-Play Video-on-demand is as old as the ‘foot’ hills but this shift of ‘prime time’ on-demand starts to change the whole meaning of prime time. If viewers around the US can effectively get the most popular shows at any time and most importantly without adverts ;

within hours after they air, commercial free, for just 99 cents.

are they not destroying their own business model? If prime time becomes anytime the advertisers will pay less, surely? Perhaps this is the real shift. As enough consumers pay for iPod Video, PVR delivered content, cable on-demand content the advertisers may be completely cut-out of the equation over time. If prime content can be pre-financed by major distributors and sold direct to the viewer at which point do advertisers enter the distribution chain? No thinking about it advertisers will simply buy some of those foothills as well – what else would happen. Certainly the BBC started this ball rolling a couple of years ago with bitorrent distributed programming (I remember being at a momentous internal BBC presentation by Lawrence Lessig in 2003 when the penny dropped for quite a few BBC execs, hence the current BBC-on-demand, creative commons impetus. But back to the issue of advertising funded popular programming vs ppv models it comes down to two:
1 Cheaper on-demand content is full of ads
2 You pay more for less (sneaky on-screen graphics or product placement) or no ads

Whether or not on PVRs and on-demand cable you can skip them then comes down to a simple fact – if the ads are interesting to you, like an interesting programme you watch them – but all of this is another story for another long series of posts. Keep tuned in.

Posted by Gary Hayes ©2005