A friend of mine, who works for one of the major Pay TV networks, mailed me a comment as I had inadvertently turned off comments when I moved to WordPress. He writes:
On the I-pod / Disney thing, and nails in coffins, not sure I follow (but then again, must confess I read in somewhat of a rush). The only way a show can become a successful traveller to other forms of distribution is if it’s already a hit on the the US network it’s produced for, so you could say it makes the network even more powerful. The caveat is that it is possible it’ll affect international sales values and secondary US sales, since portability and e-distribution (regardless of whether territory-filtering technology is employed on the downloads) will mean that viewers overseas will have avenues open to them to watch content before it hits their own channels. Lost is sold in 183 territories, by the way.
As an aside, there may more behind the Disney/Apple deal than you think. Pixar is a Steve Jobs company and it said it would no longer distribute its movies through Disney recently. By giving up the BVI content to Apple to help them sell video i-pods, you could say that it would make Pixar feel a little warmer towards Disney than before. This speculation is doing the rounds.
Now, I’m sure there is something more to the Disney/Apple/Pixar deal, but the main point is in the first part of the comment – the idea that a show can only move to other forms of distribution once it has been a hit on a major network. It is exactly this thinking that is being turned on its head with Mark Pesce’s thoughts on BitTorrents and Chris Anderson’s Long Tail theory. The assumptions here are A) That the networks are the sole repository for large audiences and B) That something needs to be a “hit” in order to travel.
Pesce argues exactly the opposite for networks (indeed this is the problem they face), namely that peer-to-peer systems mean large audiences without the need for a network aggregating them. The Long Tail suggests that you don’t actually need a “hit” in order to make a great deal of money. Networks are conduits and audience aggregators and both of these roles are fulfilled by the peer-to-peer downloads and peer recommendation models. But they also commission content, or at least pay for a percentage of its creation. That’s the main thrust of Pesce’s line of thought, that this is a problem with the economic model and one that is going to change. Other financial models already exist and more alternatives will be found.
Put simply, there is already a large audience for “unsigned” as well as commercial content, it’s just that a lot of the time they don’t pay for the content. Viral campaigns and the blogosphere are clear indicators that large numbers of people can be reached. So the dilemma for the networks is this: find a way to make people pay a small amount for the content easily or watch your sales bleed away as people download it illegally for free. iTunes and the like get close to a decent version of this (although I still reckon it’s over-priced here in Australia). It is likely to continue to change the way we see TV and advertising as Paul mentions here as well as on Tapeitofftheinternet.