TV Networks Tread Streams Carefully25 Jan, 2007 By: Erik Gruenwedel
When NBC prime-time series “Kidnapped” failed to meets its ratings threshold, network executives worked with series creator Sony Pictures Television to stream the show's episodes on NBC.com.
The network did the same last year with “Book of Daniel,” starring Aidan Quinn, and executives credit streaming for building a TV audience for prime time hit “The Office.”
20th Century Fox Television streams the most recent episodes from 10 of its prime time shows on Fox.com and affiliated station sites, including perennial favorites “24” and “Prison Break.”
The number of U.S. households receiving high-speed broadband Internet is greater than the number of homes receiving cable channels such as HBO, making online delivery of TV shows an ever-more-important market, a panel of entertainment execs noted at the “Tuning in the Broadband Channel: How the Internet Is Remaking the TV Business” conference in Los Angeles.
“We've had 30 million full-episode streams in four months,” said Vivi Zigler, EVP of digital entertainment and new media for Universal NBC. “That's pretty impressive.”
She said the online episode recaps serve the dual purposes of network promotion and the ability for first-time viewers to catch-up with serialized dramas such as “Heroes.”
NBC also streams a companion show, “Heroes 360,” which expands on events in the TV show, including giving viewers clues to puzzles in the show.
Zigler said internal NBC research found the Internet enhanced the TV programming when it streamed separate “back-stories” online between the network airings.
Panelists downplayed the impact on TV DVD sales, citing internal data that found DVD business and TV viewership actually increased with episodic streaming.
Ron Berryman, SVP and GM of Fox Stations Group for Fox Interactive Media, said there had been no cannibalization of DVD sales after putting episodes of “24” on iTunes.
“I'm not saying it is not going to happen, but it hasn't happened yet,” Berryman said.
Mitch Singer, chief technology officer for Sony Pictures Entertainment, said when the discussion on electronic sellthrough and DVD emerges the question revolves around revenue.
“If we are earning less than what we are getting on the DVD, including the packaging cost, then I'm against it,” Singer said.
He said his goal is to maintain the perceived value of Sony's entertainment product, including packaged media. Singer said Apple's CEO Steve Jobs commoditized the music industry because he steered consumers away from the CD to music files playable only on one platform, the iPod, thereby retaining value in the hardware.
“I don't want my $20 DVD in the minds of the public to become a $15 movie,” Singer said. “That's bad for me. In every new format, commodization occurs, and I don't want to be the one commoditized. I want the hardware guys to be commoditized.”