Wednesday, November 02, 2005

Busted models.

Some amazing numbers from Jeff Jarvis at Buzz Machine on video and podcast downloads from Apple's iTunes Music Store.

One million videos sold in 19 days.

Four million podcast subscriptions to shows from National Public Radio.

(There seems to be some question about whether it is podcast downloads or subscriptions. I don't know if it really matters – most people will subscribe to download a single podcast. They can always unsubscribe later.)

Jarvis goes on to mention how demand for Diggnation video content quickly outpaced the demand for audio content. One of his points is that demand for online video is enormous – and he's absolutely right. The reason podcasts will persist, however, is that the cost to produce good audio content is so much less than video. It will be easier for inexpensive but original audio content to flourish.

But back to online video. I think the appearance of television show downloads on The Music Store was one of those seminal moments that most people will truly appreciate about a year from now. It's Napster-ish big. The business model of every network was already in transition – now it's imploded. Network execs are pacing the halls of their Bel-Air homes in the wee hours of the morning. They break into a sweat whenever they go past a Starbucks with WiFi that's packed with people at midnight.

Now people can download the shows they want to watch. Sure, ABC/Disney hopped right on it. They were happy to have people willing to pay $1.99 to see hot women get worked up in suburbia. More revenue is always a good thing. The problem is that while there's an audience that is happy to pay for Desperate Housewives and Lost – the two most popular ABC shows – how many people will download Freddie?

The pacing continues. Sleep remains elusive. The old model is busted.

Here's my thought. Maybe the networks start to use their big old broadcast technology as a way to basically advertise shows. Initially, shows run for free on the airwaves. The aim is then to convert people to paying for downloads of anything that's decent. Networks could launch shows on broadcast, then take them off the air and start offering them for a fee online. Or continue to offer them on regular broadcast with the downloads offering the advantages of time-shifting. Everything would be a pilot. The real revenue would happen when a show reached the popularity tipping point and people were willing to pay to watch it.

There is one thing I don't have figured out in this new model.


Not to worry. I'm sure Google will figure something out.


Blogger Dave J. said...

The same could be said of DVD sales of shows (and has been said, I am sure). DVD is better than download in many regards, too.

Besides baseball, my wife and I watch very, very little TV. But we have been sitting down watching an episode of "The Dead Zone" regularly, off of DVD.

Great question about where does advertising fit in all of this. It ends up with the marginal value 'free broadcast' sponsorship to a dwindling audience. Busted? You bet!

6:28 PM  

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