iTV 2: The Next Frontier

It would seem that the arrangement between the ABC network and Apple Computers was a success. Indeed, in the first month of downloading video content, there were almost 2 million downloads of music videos and television episodes, the first of which were the hit shows LOST and Desperate Housewives.
Earlier today, it was announced that the NBC network has followed up with an arrangement of their own with Apple, putting a number of new shows on to the program, including the new Battlestar Galactica, Law & Order, Surface and the Jay Leno show, among others, all told about 12 new shows to now download and watch on your iPod or computer.
Apple has proved that the world of Television can now enter the Internet, given the huge number of downloads in such a short amount of time. It is not, however, the first foray into the downloading business that NBC has looked into. Shortly after the announcement between ABC and Apple, NBC and CBS both announced that they were starting DirectTV systems, where you can download an episode of a number of their shows for 99 cents, for a twenty-four hour period. The problems with that, is that it’s only a twenty four hour period, and for a dollar cheaper than what iTunes charges. However, with iTunes, you can watch the same thing just twice in two days and make back the extra dollar. NBC seems to have realized this and has moved to this medium.
With their addition to iTunes, users can now download 3,000 separate music videos, short videos, television episodes and Pixar movies.
This represents a big change in the landscape for Television. It’s entirely possible that it can help add to revenue quickly instead of just relying on ratings. Episodes of LOST are placed online after they have aired, allowing for a couple of things:

· While Cable is popular, not everyone has it, either by location or by expenses. Downloadable content gives networks access to a huge number of people who might not be able to watch some of these shows.
· This also affects the timing of episodes. Dead slots might not be as lethal to a show any more, as Threshold and Firefly have shown (Friday nights are killers). The ability to download a show could make an otherwise dead show somewhat profitable if people are able to download it at their leisure.
· Cost. At 1.99 per episode, it’s a very small expense, and iTunes also offers entire seasons as a bundled package at a slightly cheaper price. The entire 1st season of Battlestar Galactica is around $25. The first half of Season 2 is just 20. Compare this to the price of their respective boxed sets at around $50 per season. I’ve decided that I’m going to start downloading all of my music albums because it’s so much more cost effective this way. I can now theoretically download the episodes of TV shows that I want to watch and never have to pay for cable TV.
· No commercials. For the past two years, I’ve caught up on major SciFi shows on DVD, and it’s such a nice thing to watch entire episodes without commercial breaks.

It has been suggested that the direct download market, because of these conveniences to consumers, may have saved shows that have been cancelled, namely Firefly. While the shows that have been put on iTunes have for the most part been highly successful, they certainly aren’t going to be hurt by this arrangement. Fledgling shows that are struggling to survive, such as Arrested Development, may very well become profitable this way should their networks and Apple come together. With ABC and NBC’s push to the web, it’s expected that other networks, such as CBS and FOX, will follow shortly thereafter. As this happens, networks are most likely going to look at how shows will do in the ratings, but also how well they will sell online.