Watching the Nervous Little TV Networks


More and more TV networks are releasing their video content online for free. AOL’s In2TV is showing a ton of vintage Warner Bros. TV shows, and CBS is showing on-demand episodes of Survivor. And while I give them all my heartiest golf clap for their efforts, it still seems to me that they’ve only stuck their collective big toes in the waters and are afraid to take the cannonball dive into the lake.

It’s obvious to anyone that the future of video is distribution via some form of the Internet. It’s not just traditional TV advertising that’s dying; it’s TV itself. It’s not just about ratings and statistics. Video distributed over the Internet is interactive, engaging, and on-demand. While the Internet pipes aren’t yet big enough to warrant direct streaming of HD-quality TV shows, TV networks should at least be preparing for the day when their primary business of broadcasting content over the airwaves becomes pushed aside by the distribution of content over IP.

With today’s online advertising technology, it should be possible to serve appropriate video ad segments according to a person’s viewing habits, how they found the video in the first place, where they are located, and what content is contained in the show. Advertising over the air, or even via cable is too static. All you can do with them is estimate the number of viewers by a score determined by a third-party rating service. In other words, a targeted video advertisement delivered via IP is worth more per second than a 30-second spot delivered to a broad, un-targeted audience via TV.

There’s also been the move to sell downloaded TV episodes as premium content. Nearly all of the major networks are selling shows on iTunes. But seriously, how many people are going to pay $1.99 for an episode of Welcome Back, Kotter? It makes much more sense to distribute older content for free, and incorporate some sort of contextual video advertising system.

Most of the newer video content that TV networks are distributing online appears after the initial TV release. This May Disney will release Lost, Desperate Housewives, Alias, and Commander in Chief available online a day after their initial TV broadcast. I presume they’re trying to avoid pulling viewers away from their TV sets, thus reducing ratings and lowering TV ad revenue. It’s an acceptable transition strategy, since TV is their primary business, but any delay longer than a week or so not only means the loss of potentially valuable online ad revenue, but it also encourages piracy.

People want to watch their favorite shows as soon as they’re released. The longer the delay between the release of a show on TV and the release of a show online, the greater the window of opportunity for would-be video pirates to re-purpose the TV content and make it available online themselves. TV networks need to focus on phasing out TV advertising as their primary business and focus on the more potential Internet advertising. To do that, they need to release their TV content (with advertising) as close to the TV airdate as possible, with as high a quality as possible. If a viewer can watch or download a high-quality version of a particular show via a TV network’s official website, why would they waste their time downloading some shoddy video with a questionable bit rate and unknown codec ripped from TV or DVD?

The TV industry’s slow transition to online makes sense if you consider their commitments to the traditional broadcast, cable, and satellite platforms. But their still sluggish movement towards online means there’s plenty of room for a small agile start-up network to trounce them all…if it can get in there fast enough.


  1. This story leaves out the great weakness of on-demand …timing. Ads have to as relevant to WHEN as they are to CONTEXT. Sports and News programming — that cannot be time-shifted — may be the premium-priced inventory in a glut of on-demand, time-shifted, consumer-controlled scripted entertainment…Given how time sensitive most brands are — think holiday shopping — on-demand just won’t get it done.

  2. Ken, I think you’ve nailed it on the head. The networks have themselves to thank for the gradual push towards a digital, on-demand format. The expectation of the buying public has been pushed towards over-sized, high definition televisions and “watch it when I want” TiVo units by the retail chains. As a result, we are looking for, no…demanding, the highest quality picture and the widest variety of programming. Its a natural progression that leads us to seeking out what we want to watch, when we want to watch it, regardless of the source of that programming. Enter the age of television content on the web.

    The point you bring up that really caught my attention was the idea of how open a market this is for the broadcasting upstarts. Witness how quickly the Blog sensation has enveloped the medium. With the low-priced availability of high definition video cameras and the proliferation of sites promoting independent video, it seems an obvious evolution of the medium to where the aspiring film student will see his/her creations receive as much attention as the next new network offering. The viewing audience is no longer the private domain of the big networks, but rather, up for grabs by whomever can generate enough interest in their site. Enter the age of product-sponsored web sites presenting video content. [Remember the Mutual of Omaha’s Wild Kingdom?]

    The new “CBS” or “ABC” might be the or PG&’s where a product comes to be associated with a style of programming promoted by the company’s web site. And who’s to say that that programming will have to be created by a multi-million dollar production company anymore? Anyone remember what the first episode of “South Park” looked like?


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