I assume it is because of Steve Jobs, but Disney seems to be the first TV Turtle to stick its head of the shell and test the water. The broadcast model of the 1940's is woefully out of date so I hope they hurry up already.
Disney Will Offer Many TV Shows Free on the Web
ABC's Prime-Time Hits And Zap-Proof Commercials Are Pillars of Bold Strategy
April 10, 2006
Walt Disney Co. plans to make much of its newest and most popular programming on ABC and other channels available free anytime on the Web, in a move that could speed the transformation of television viewing habits and help revive the struggling TV advertising business.
Nearly anyone with a computer and a broadband connection will be able to watch Disney's TV offerings online. Still, Disney is putting such a huge volume of programming online that some analysts say it could spur sales of media-rich computers, as well as devices that transmit Internet content to be watched on most types of TV sets. "All this area needs to explode is enough top-notch content," says Brad Adgate, senior vice president at Horizon Media, a New York consulting firm.
Online streaming -- the technology of broadcasting video programming over the Web -- has been an area of great untapped potential for the TV industry. The possibilities were underscored by the success of CBS's online streaming of the NCAA basketball tournament in recent weeks. The "cable bypass," as CBS Chief Executive Leslie Moonves calls it, could have dire implications for cable and satellite purveyors because it has the potential to cut off the revenue they receive for delivering programming. Making shows available online also could undercut the on-demand services cable operators are rolling out.
The ABC initiative reflects a sharp turnaround at Disney's television unit. Two years ago, ABC was the last-place network, and cable properties such as ABC Family were in a slump. Then Chief Executive Robert Iger, who has become unexpectedly aggressive in digital media, grouped all of the company's TV units under one umbrella.
Disney's Ms. Sweeney installed a new management team and streamlined operations from creative development to marketing and publicity. The result has been the launch of monster hits across the division, from "Grey's Anatomy" on ABC to the Disney Channel's "High School Musical." Just two new shows -- "Desperate Housewives" and "Lost" -- are expected to generate $1 billion in syndication revenue over the next five years.
The group has also emerged as the leader of the TV pack in digital media. Disney was the first to offer both broadcast and cable shows for download on iPods, cutting a deal with Apple Computer Inc. in just three days last fall.
TV isn't free? Is that why the broadcasters got FREE spectrum from the government for decades to broadcast their soap commercials? I watch network TV but its hard to feel sorry for them.
Disney's Web Move Shakes Up Decades-Old TV Model
Sorting Out Winners and Losers: Advertisers Reach More Consumers, But Local Stations Feel Shut Out
April 11, 2006
Walt Disney Co.'s decision to offer some of its most popular ABC and Disney Channel shows on the Web free of charge sent various segments of the TV business racing to their corners yesterday to sort out the implications of a move that could turn a decades-old business model on its head.
Advertisers are hungry for opportunities to reach consumers on the Web and several major marketers are embracing ABC's plan. But it is still anybody's guess how consumers will react to Disney's plan to stream ABC and Disney Channel shows with non-skippable commercials on the Internet. Although the ads will be specially designed for the Web -- and will be much shorter than traditional spots -- viewers may still find the interruption irritating enough to tune out. Advertisers that have signed up, including AT&T Inc. and Toyota Motor Co., are taking a leap of faith that this won't lessen the potency of their on-air commercials.
Disney's plan represents a significant shift for media companies as they rush to avoid getting squashed by fast-growing digital media. Until now, companies have largely sought to charge consumers for content, whether it's $1.99 for a download of "Survivor" on CBS.com or $1.99 for a cellphone ringtone of the theme song from the TV show, "The O.C." Companies have said they are trying to control piracy by teaching consumers that TV isn't free.
Studios that produce and own TV shows and films face a different quandary. The TV industry is wrestling with how to handle the disintegration of decades-old models of distributing content -- and increasingly deciding to evolve rather than cling to traditional practices. As the TV business grew up in the 1980s and 1990s with the expansion of cable, media companies generated huge profits by doling out TV content one teaspoon at a time. Broadcast networks were given exclusive runs. When ratings fell, TV studios then sold repeats of the shows to local stations and cable channels. After ringing up those sales, a DVD might hit the shelves.
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Analysts predict Disney's move will spark a stampede of networks putting current shows online. "Other networks must follow ABC's lead," says Josh Bernoff, an analyst at Forrester Research. "As of this moment, CBS, Fox and NBC are behind."
That's not how they see it. Rivals were reluctant to openly criticize Disney yesterday, but several privately said they don't share ABC's optimism that the initiative won't undercut syndication sales. Moreover, none pledged to alter their current online strategies, which include developing unique programming for the Web and making shows available on as many platforms as possible.
