Brian & Ann's European Experience

Friday, May 06, 2005

Thougths on Downloading TV

I miss American TV. I miss the shows. I miss the networks and cable. I even miss the commercials. It's hard to explain the "minor league" feel to the TV ads that you see in Europe. I guess small TV markets are a disincentive for people to spend a lot on TV ads, especially when it's tough to reuse the same content in different markets because of the language barriers.

So what I generally do is steal my TV.

Actually, I don't even know if it's stealing anyway, at least not for the stuff that you get off of the broadcast networks. See, since I downloaded the awesomest BitTorrent client in the world (Azureus) and since I found my torrent treasure trove (isohunt.com), I have been able to download TV episodes and movies at will. Okay, it can take hours for a full TV episode (which usually runs about 350 megs) or even days for a movie to download, but I still get it.

And is it wrong?

For movies, CD tracks, and shows from cable TV channels, yes. It is wrong. You are supposed to pay for that product. For broadcast TV shows though (like "Lost" and "Desperate Housewives"), I'm not so sure.

The fee you pay to watch network TV shows is that you have to watch them when the networks want you to, and you have to sit through the commercials. But other than that, the content is freely distributed through the air (although I doubt most people use antenna anymore).

THe point is, if you are willing to "time shift", and watch shows at times other than their scheduled "air" date, then what's wrong with that? The shows were publicly distributed, how can re-distribution via the Internet be wrong?

For shows on cable, the argument is different. You're supposed to pay a subscription rate to get access to the content, and if you download the shows you deprive the cable companies from the revenue, who then deprive the cable channels, who then can't pay the producers of the show, who then can't make the show in the first place. And I think we can all agree that's bad.

Does the same argument apply to watching the commercials on a broadcast TV show? Am I obligated to watch the commercials? Are they part of the show? If I videotape the show and watch it later and fast forward the commercials, am I breaking the law?

I was one of the early adopters of Tivo, and I can tell you that besides the value of pausing live TV, of automatically recording and cataloging shows I like to watch at my leisure, one of the big value adds was the ability to skip through the commercials. You start watching a show fifteen minutes after its start time, you hit the "fast forward" button through the commercials, and by the end, you catch up to 'real time' and you finish watching the show with everyone else, but without watching the commercials.

It's technology baby.

Content providers need to understand that consumers don't want what content providers want, they want the content. And in today's world, they want it on their temrs: the want it on their schedule and without having to sit through ads. And today's technology allows them to do that.

If the networks and cable operators were really smart they'd initiate Video On Demand immediately and figure out the licensing deals with the content owners as they do it.

The real value of ABC, CBS, or NBC is the fact that they are the gateway to the consumers. They are a distribution channel. In the past, their distribution was linear and meant that only one product could be served to many customers at any one time. Technology now makes it possible for them to provide a HUGE value for their customers: any product they want to watch, when THEY want to watch it.

All they have to do is figure out how to charge for it.

People already buy an entire season of a show they like on DVD, but they have to wait months after the initial air date. Why? Just let them watch it online!

Besides the obvious business benefit of being able to make money repeatedly from the same piece of content (as opposed to a single airing of a TV series episode for which they only make money on it the one time that it airs), there is also the ability to differentiate and sell product at different price points.

Here's a potential model: It's free to watch it the moment it comes out (but in exchange you have to watch ads). But you could also watch it online, any time after the original 'air' time, for say ten bucks an episode (which is roughly the price of a movie ticket plus a premium for the convenience of not having to leave your home), or you could wait three months after the ENTIRE SEASON is done and buy all the episodes for sixty bucks, which works out to about $4 an episode for a fifteen episode show, less for a 22 episode show... but you have to wait a LONG time from the initial air date.

It's so simple! What are they all morons!?

Obviously, it's not so simple. But the fact you can't ignore is that the technology is there, and it will be used, and you can either be a part of it (think iTunes) or you can fight it (think RIAA suing college kids).

Sure, it will cost to develop and implement, but like all new services, there will be someone with the know-how and infrastructure to serve content via the Internet who will provide the infrastructure in exchange for a piece of the action, and everyone wins because specialization is the key to economic growth (as I'm learning in my economics class).

But the networks then need to rethink their role in the world. Watching NBC starts to mean less, and recognizing that NBC.com is the place you go to get your filmed entertainment, any time you want it, starts to become more important. The networks still have a role to play in terms of marketing product to viewers, but now they don't have to be restricted to marketing what they can show in the 24 hours of a day. Now they can market as many shows as they can effectively find consumers for, because they aren't restricted to 24 one-hour time slots. THey could sell a thousand shows, and they should. Because for every episode that ever aired, there is someone in the world right now who wants to see it, right now, and would be willing to pay for the privilege.

Think what you could do if you had enough capital that you could buy the syndication rights for all of the best TV shows and sell them, Pay per View, exlcusively from your website. Or if you could make exclusive licensing deals with all the studios so taht none of your competitors could offer the same product.

Of course you can't, it's too much up-front capital. But for sure certain 'networks' will specialize in certain kinds of content. (WB will buy all the cheesy teen shows like Dawson's creek and One Tree Hill and UPN will buy every African American TV series ever made, probably at a discount...).

It's a brave new world once the distribution method for TV switches to the Internet.

Or at least, it WILL be a brave new world.

But who will take the first step?

Hollywood tried it (somewhat) with Movielink.com. Fox did something novel when they cancelled one of their 'reality' game shows halfway through, but put the last five episodes on their website (Pay per View of course).

We'll see what happens, but my bet is that it will take some newcomer who starts with cheap, old, syndicated shows and starts to prove the concept before the big boys will move.

I wonder if I could do it. Just so I could then sell myself as a consultant to all these big evil corporations to help them with the transition...

;-)

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