To the surprise of no one, the new deal between Apple and Disney — which enables iPod users to download popular ABC TV shows such as “Desperate Housewives” and “Lost” as soon as the day after airing — is causing a commotion. A story in today’s Wall Street Journal (subscription required) examines the potential impact of this deal from several angles, some of which are not pretty.
First, there’s anger. ABC TV affiliates are upset that they weren’t even notified of the deal, much less consulted on it. They’re worried that it could impact their revenue: if people know they can just download a hit show anytime, why would they watch it when it’s aired? And surely they won’t stick around for the reruns. This hurts ratings, and the ability of the affiliates to sell advertising.
This is the same argument that the TV networks (now all owned by larger media corporations) used in the early 1980s against VCRs and home taping. The irony is that, after fighting bitterly in the courts (and losing), the networks benefited greatly in the long run from a whole new revenue stream.
Meanwhile, actors and writers are also upset: they want a cut of the download revenue as well.
Of course, everyone saw this coming. A-la-carte television hit cable systems two years ago; wireless phone companies have introduced video programming on cell phones; and major internet portals have been itching for TV and movie programming for downloads. It was only a matter of time before Apple cut its deal.
(And now that Bob Iger has taken the reins at Disney, last week’s announcement was a perfect opportunity to show the media community that, unlike his predecessor, Michael Eisner, he can play ball with Steve Jobs. This also bodes well for a possible renewal of the Disney/Pixar deal.)
All this is well and good, but the real issue, as the Journal points out, is consumer behavior. Tivo users have the luxury of controlling their TV-watching habits. Theoretically, they’re not married to appointment TV. But have they really changed that much?
And that’s the key question: Is the Disney/Apple deal the straw that broke the appointment-television camel’s back? Will all those iPod users download shows at the expense of watching them at air time? Or will they use their iPods just for repeat viewings? Or will their usage be a combination of both that, as with the VCR, added up to a net gain for the media giants?
If users do significantly change their behavior, away from appointment television, this could be the deal that impacted everything: content distribution, content creation, advertising, and on and on.
If so, ABC’s affiliates have a right to be worried. But something tells us they’re not doomed. Yet.