iTV

Networks Rush to Offer TV Shows Online

Friday April 7, 9:31 pm ET
By Gary Gentile, AP Business Writer
Networks Rush to Offer Individual Programs, Season Subscriptions Online As TV Viewership Drops


LOS ANGELES (AP) -- These days, there's more than one way to get "Lost," visit "The Office" or keep "Law and Order." Six months after ABC struck the first deal to sell commercial-free TV episodes online, networks are rushing to offer everything from individual programs to season subscriptions.

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Analysts say networks have little choice but to try multiple strategies as viewers watch less TV in primetime and embrace technology that lets them watch shows whenever and wherever they want, including on computers and portable devices, such as an iPod.

Studios also want to offer a legal alternative to the many file-swapping services that offer pirated copies of shows.

"Technology is moving ahead with or without them, and if they don't try to find a new business model, they're going to be stuck with the old business, which is in decline," said Harold Vogel, media analyst and author of the book "Entertainment Industry Economics."

"The problem is nobody really knows what the new business model should be yet," he said.

In its deal with Apple Computer Inc.'s online media store iTunes, The Walt Disney Co. has sold programs from its ABC and ESPN networks and the Disney channel for $1.99 each. Revenue from those sales has been minuscule compared with advertising sales for television.

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ABC said it has learned important lessons so far about offering online content. Among them is that TV ratings of hit shows haven't been hurt.

"We've only increased overall media consumption for some of our hit shows and some of the shows we're trying to promote," said Albert Cheng, executive vice president of digital media for the Disney-ABC television group.

One analyst said digital delivery can be more valuable for promoting shows than generating revenue.

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The growing online availability of TV shows and original video produced by Yahoo, MSN and other sites has led some to predict the demise of traditional TV watching.

But some analysts aren't ready to write off network TV.

"Five years from now, we'll have a much better idea of how it will shake out," Vogel said.