Exploding TV: KA-BLOOM!

TV has finally exploded. And if other media — newspapers, magazines, and even online companies — don’t watch out, they may lose the broadband internet to TV companies.

In big news today, Disney said it will make episodes of its shows available online, for free and on-demand, the day after they air on broadcast.

On April 30, ABC will unveil a revamped Web site that will include a “theater” where people with broadband connections can watch free episodes of “Desperate Housewives,” “Lost” and other hit shows on their computers. Episodes will be available the morning after they air and will be archived so people can eventually view a whole season. A Disney Channel version with five shows will start in June, and an ABC Family version is also planned. Disney’s Soapnet cable channel will start offering programs free on its Web site, Soapnetic, on April 17.

Episodes of the ABC shows — which can be paused, rewound and fast-forwarded — will contain commercial breaks that viewers can’t skip, making Disney hopeful it has figured out a way to turn the delivery of programs over the Web into a profit-generating business. Ten advertisers, including Ford Motor Co., Procter & Gamble, Universal Pictures and Unilever, already have signed up.

The initiative, to be announced today by Anne Sweeney, president of the Disney-ABC Television Group, marks a watershed: the first time a TV company is offering major prime-time shows free online without restriction.

Well, almost without restriction. They will come with commercials that can’t be skipped. Will the added convenience of watching shows on your schedule — without having to pay iTunes — make up for the inconvenience of watching commercials? For now, it certainly will.

Not very long ago at all, the networks would not have dared to do this for fear of pissing off their distribution channels: station affiliates, cable MSOs, and even retailers for the DVD market. But now the force of change on the internet is so great that the networks are facing a choice of pissing them off or dying. They are choosing the former. I’d sell your cable stock, by the way.

ABC is being smart not to try to entirely replicate broadcast.

As part of an effort to engage the online community, viewers from around the country will be able to gather in “rooms” online to watch an episode of, say, “Lost” and chat about it. Disney will also promote the creation of fan sites for various shows. “We want to tie all of these fan sites closer to our brand,” Mr. Cheng says.

The ads won’t look like typical TV commercials. For starters, instead of five commercial breaks during an hourlong episode, there will be three breaks lasting a minimum of one minute each — all of them from the same advertiser. Mike Shaw, ABC’s president of sales, says viewers will have a choice of what type of ad to watch — for instance, a traditional video commercial or an interactive “game” commercial.

And that leads to the real danger to media competitors: Ad Age reported last week that the ad industry is “ousting broadcast TV as its central organizing principle.” That is seismic.

Instead, Ad Age reports (san links; their site is half-down now) that “in its place, a more flexible notion of video is emerging, one that is rendering obsolte many industry silos, forcing the rearrangement of TV and internet buying, planning and selling units, and bringing newbie digital types into ever closer proximity to grizzled broadcast buyers.”

What this really means: TV is grabbing a share of online advertising by redefining TV as both broadcast and broadband. Advertisers have always been more comfortable spending big money on TV. Now they can continue to spend their money with those familiar players and get broadband, too. And TV is doing this so as not to lose money to other media even as broadcast — and next, cable — shrink; this is how they rescue upfront. And if TV succeeds at holding advertisers’ attention and money, other players — online companies, magazines, newspapers — may not be able to break in. This an effort for both networks and ad agencies to keep ahead.

“Whenever I hear the word ‘broadcast,’ I try to dump it,” said David Rolfe…. “It’s a grotesque anachronism that implies the model where we’re just feeding viewers whatever we want them to have.”

At last.

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  • Since the article is behind the firewall, I can’t read anything other than your quotes. My question, though, is about the files. If the episodes are streaming-only, I’m not sure that’s a very big deal. The hassle of watching streaming video, broadband or not, is just too great. It’s not worth my while to sit at the computer while waiting through the dreaded buffering.

    If the shows are downloadable and, (most importantly?) iPodable, that’s a completely different thing.

    Interesting about the different ad models.

  • You’re pointing at the smaller explosion, Jeff. The ad industry turning away from broadcast television as the center of its existence? *That* is the explosion that will make a difference . . .

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  • Paw

    So, Jeff, you can do this now with Tivo or your cable company DVR, only there you don’t have to watch the commercials. No new content to speak of. What’s the big deal?

  • John Henry

    # Paw Says:
    April 10th, 2006 at 10:36 am

    So, Jeff, you can do this now with Tivo or your cable company DVR, only there you don’t have to watch the commercials. No new content to speak of. What’s the big deal?


    I think the big deal is for people like who are unwilling to pay the extra $4-5/month for the 4 networks on satellite.

    Now, if there is a show I am hearing about, I can check it out.

    BTW: I agree with the other commenter that they need to be downloadable to be of any use to me.

    John Henry

  • Paw

    Don’t know about you, JH, but for me, $4 to $5 a month is more than worth the hassle of watching these repeats originating from a PC (downloadable or not – they would still have to be transferred to a portable digital player or burned to disc to be able to be viewed on a real TV) and being able to zip the commercials. My $.02.

  • Disney said it will make episodes of its shows available online, for free and on-demand, the day after they air on broadcast.

    That makes SO much more sense than any other plan, even HBO’s endless replaying of episodes. Good show, Disney.

  • A major network unleashing their content from the broadcast schedule is something of a step forward, but forcing viewers not to skip ads feels like a step backwards. It’s great that they are thinking of ways to make their ads more medium-appropriate, but they must not have much confidence in their ability to do that if they think they have to force people to watch them.

    To me it’s way more worth it to buy an episode of Lost for a couple of bucks and know that I own it, can move it, and watch it any time online or offline, without breaks. Give me that over watching a streaming episode for free with commercials any day. Really, in the end, if the ads are good I’ll watch them, but leave that decision up to me. I watch lots of ads for their own sake on YouTube, without any incentive or provocation. One has to ask what the purpose of the advertising is if it has to be force-fed. If it’s just for brand reinforcement then there must be a better way.

    I really hope this doesn’t mean they’re cutting off their participation in the iTunes model.

  • Most important line: “I’d sell your cable stock, by the way.”

    Most old school line: “We want to tie all of these fan sites closer to our brand.” In the words of the immortal Mick Jagger, “You can’t always get what you want.”

    Nice post, Jeff.

  • Well, I’m going to need some kind of box that will send the streaming video from my PC to my HDMI / HDCP port on my 50″ TV. And for ALL the shows that are broadcast in high-def, the stream should also be in high-def.

    I’d just hate to give up picture quality now that I’ve been spoiled.

    If they can do that, then they can play commercials if they want. I still reserve the right to switch channels while the commericals are on.

    Oh, and you shouldn’t sell your cable stock just yet – after all, their the ones that provide my broadband pipe!

  • I’m not convinced the programs they go direct-to-web with won’t suck. Look at their atrocious sellout of Bambi — one of the icons of the Disney legacy — as a crappy direct-to-dvd piece of trash. (There was a billboard for it in my (urban) neighborhood, and it ticked me off every time I went by it).

    Most traditional media organizations treat the web like a dumping ground, and going to the web first doesn’t neccessarily change that.

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  • Steve

    So, currently I can TiVo the episodes the day they are shown and then watch them whenever I want on my nice tv screen, skipping commercials.
    With this plan, I have to wait a day to watch them on my small computer screen, and I have to watch commercials.

    How is this better again?

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  • Jon

    I think this is a good move.

    While I understand everyone’s frustration at the “free” and “not skipping ad’s” – watching advertising is the fairest “opt in” advertising there is.

    As content producers, we need a way to pay for the costs that cover making a program. And those costs are not cheap. Even without any star salaries at all, an hour of programming on the super cheap starts at $150k and runs into the millions. I’ve produced stuff with entire staffs of less than 10 people, and totally UNPAID talent, for Discovery channel and it still costs over $150,000 per hour to shoot it, post it, and deliver it.

    However, there’s no need to have an exclusive model. The either-or of ad supported and paid for content is silly – and we should have it either way we want it. Two buttons to push. One is your opt-in for watching with ads, and it’s free. The other, is opt-out, no commercials, and it costs a buck or two. Frankly, that is more than fair. You can choose what’cha like. Want to flip channels during commercials? Go to the bathroom? Fine, and dandy. That’s no different than it ever has been on TV.

    The HD streams are still a ways off with encoding and DRM standards all over the map… not to mention the data storage costs of all those HD streams. Once the holographic data storage really gets cooking in another 18-24 months and ultra-high capacity, low-cost/high-speed storage comes online, we’ll see a lot more content companies making that transition. Right now the cost-benefit is just not there.

  • Jon

    *sorry* that “per hour” above means “per finished hour” of programming. Not per hour of labor.

  • I suspect the real explosion is not the ABC announcement but rather the position this puts the other networks and content prodivers in.

    Right now ABC is going with streaming and no-skip commercials. Network x might go with download in a context ad frame. Network y could offer the “button” the earlier commentor mentioned.

    And, just to speculate for a minute, exactly why do the producers of these shows need the networks if these models work? If I own – to take an old example – Seinfeld why not put the entire thing up on the net with a few different revenue options and see what sticks.

    (I’d sell that entertainment conglomerate stock too.)

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  • Jay,
    Exactly right. At some point, soon, content producers will get rid of all middlemen.

  • Here’s a prediction, the cable companies that offer broadband internet are going to sniff out video and compromise the connection quality, just as the telcos currently do for Skype/VOIP. Totally blocking it is illegal but I’m fairly certain that they can legally slow it to a crawl.

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  • Ralph Phelan

    “contain commercial breaks that viewers can’t skip”

    Yeah right. I wonder how long until some hacker comes up with a way to convert their content into some other, standard, format that you *can* skip. Personally I’m betting on the crack being released within 48 hours of the product.

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  • I wonder how long until some hacker comes up with a way to convert their content into some other, standard, format that you *can* skip.

    You can plug a firewire cable from your HD cable box into a PC, dowload whatever you tivoed, convert it to MPEG 4, cut out the ads and release a high quality version online with BitTorrent were you so inclined.

  • This will almost certainly include geographic blocks so that the shows cannot be watched from outside the US. Which means that overseas English-speakers who want to see them will either have to wait for the shows to finally reach their markets (yeah, right…), or resort to (ahem) other sources.

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  • Paw


    So, no “middlemen” at all? So what’s going to happen, Jeff? Content producers will simply make original series video content available on the Web for a fee, just like that? Studio quality content, not just some schmuck with a video camera?

    How are they going to get the word out on all this new product and convince customers to pay for it? Are they going to spend their own money promoting this new product? Before they’ve even made a dime from it?

    Are they going to stream it for free? Where are they going to find advertisers willing to do that without some guarantee of exposure to their advertising? Who’s going to finance it without some guaranteed income?

    Content producers need middlemen, Jeff. They help absorb the risk. Jay’s comment uses a program like SEINFELD, which has already been exposed to millions via these “middlemen”. Without them, it’s unlikely Jay would even have known SEINFELD existed.

  • EuroWatcher

    A friend tells me that you can do better than this using binary newsgroups. A 10 – 20 min download brings you a near DVD quality episode with NO Ads that can be converted for use on any device capable of playing it. The same friend says that the episodes are available normally the day after they are aired if not before. Although it’s ‘nice’ of the channels to try this, why stick with streaming when you’ve got an tried and tested means to do better.

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  • @ Paw –

    Recently the Guardian ran a series of podcasts featuring Ricky Gervais and the devine Karl Pilkington. There was little fanfare and less advertising, yet these quickly became the most downloaded podcasts on the web (or at least that’s what they told us). The reason they won through is because they are genuinely very funny. Admittedly RG is not a no-name but still, without corporate bluster and fuss, word got out and these went huge overnight (if you haven’t heard them, btw, do seek them out – hilarious). Anyway, my point is, the interwebs does a fantastic job of filtering wheat from chaff and this is a process that will improve over coming months and years as users get more sophisticated and better at finding their counterparts on the web. The endless tease of “Lost” or “Invasion” will soon be forgotten, to be replaced by the delights of tomorrow’s “Repo Man” or the next day’s “To Kill a Mockingbird”. It is all just beginning. The dark side is predicted in Houllebecq’s “Atomised”, but the light from a billion creative personalities will drown it out.

  • Paw


    Hear what you’re saying, but a few questions come immediately to mind:

    – did Gervais and Co. charge for these podcasts?
    – was it original content, never exposed before, anywhere?
    – were they video or audio?
    – was does “most downloaded podcast on the web” really mean? A thousand? A million?

    I guess the point I’m trying to make is that it costs a great deal of money to produce a studio quality TV series. Like it or not, producers won’t be able to fund these series without some guarantee of income. The biggest problem that I see for original video content on the web is the roadblock of cost. Would REPO MAN or TO KILL A MOCKINGBIRD have ever gotten made on spec, which is what this model essentially is? Or was it necessary to have a distributor/backer willing to share the financial risk for a share of the potential reward?

  • wdj

    Yes!!! I just got my 19 wide monitor, and upgraded my DSL. Perfect timing! I just hope my favorite show (24) is available. I don’t know who’s network it is on.

  • weboy

    I think the most interesting aspect is your last part about the changing of advertising… although within the industry, I don’t think it’s really news (I work in Marketing). The reality is that online ads and e-mail have increased the ability to show when marketing is really reaching the customer, and there’s a less clear “bang for the buck” in general TV advertising. There’s a lot of marketing going on that’s very targeted and that the mass audience may never know about, unless its a product or category that interests them. I think the attempt to let the viewer define which ads they want to see in terms of form or category may be a real mindshift – or as someone suggests above offering ads for free content and a charge for no ads may work (but I think it’ll eventually cost more than a buck or two to be financially viable). But I think the economics of TV are making all of this pretty necessary when networks can’t guarantee the ind of audience reach they used to.

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  • Paw –
    – No
    – Yes
    – Audio
    – Millions (though who was counting and how I am not sure)
    Interestingly, they did decide to go to a paid-for model afterwards, tho’ I don’t know how that is doing – I haven’t paid for any. They inserted some truly terrible adverts into the free version that were supposed to “blend” with the mix but clearly needed a great deal more work.
    I take the point about TV – audio a lot cheaper of course – but still think there is magic to be made on the fly out there and that it will rise to the surface.

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  • Hmm…”free” that isn’t really free, and ads one cannot escape…

    sounds an awful lot like 2000, when KMart offered “free” dialup service via Bluelight.com…which wasn’t really free beacause every time a dialup was initiated, consumers were confronted with a twangy commerical from The Judds.

    They figured all K-mart shoppers were into the Judds. They were wrong.

    Rather than hacking, we just got around it the old fashioned way–walked away, turned the sound off, or just stopped using Bluellight.com

    When there’s TiVo, where you can get around the commericals, why bother with online viewing where you’re totally stuck with commericals?

    It will, though, be interesting to watch this unwind–esp. now that AOL’s turning itself into a network of sorts.

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  • Roman

    TV is not only gaining a share in broadband. But also gets more and more victimized by online pirates. Just look at the tons of online tv shows available for download from video hosting websites or “video directories” like contentstock.com

    And the worst is yet to come…

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  • I beleve too that TV is not exploding but rather, it is imploding.

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