ABC has a new Webcast deal, this time with Internet television service Veoh. Under the arrangement, full-length episodes of Desperate Housewives, Lost and Ugly Betty will be available on Veoh's Web site. The deal is only the second time ABC has licensed content to an independent vendor.
Other networks, notably NBC, have moved much more aggressively into the strange new land in which networks produce content for broadcast, then license other sites to replay it. NBC and Fox joined forces last year to create Hulu.com, a portal for the networks' content.
Licensing content to outsiders is not a concept that comes easily to network executives, who are still attached to the control they used to assert over every aspect of viewing, creation and production.
Back in 1961, Newton Minnow, then chairman of the Federal Communications Commission, called broadcast television a "vast wasteland." Despite a few islands of quality like All in the Family, early seasons of M*A*S*H, and The Simpsons, Minnows' description pretty much held up over the decades.
Viewers were rewarded for their many years in the television desert when cable networks like HBO and Showtime empowered producers to create quality shows like The Sopranos, Six Feet Under, and The Wire. While those shows made the current decade into a golden age of cable television, the conventional wisdom was that network television, with falling viewership and poor shows, would eventually die.
Giving Up Control
But recently the broadcasters have responded in an unexpected way by giving up control and allowing television auteurs to create compelling television for the first time since the 1970s. The result has been occasionally outstanding network television such as NBC's Friday Night Lights amid the wasteland of reality television and martial-arts cage matches.
If the networks have seen some light when it comes to control of content, how are they going to handle the Web? Will pressure from the Internet result in innovative business models, the way pressure from cable resulted in innovative programming?
That is happening, said Dmitry Shapiro, Veoh's founder and chief innovation officer. "You are practically seeing a mad rush of networks clearing rights and digitizing their shows and getting partners to showcase their shows," he said. "They now realize that most of their viewership happens outside their own sites."
A Global Marketplace
Tim Bajarin, principal analyst with Creative Strategies, agreed. "I have argued with TV execs for 15 years about this and told them that they needed to see the Internet as just another distribution medium for content," he said in an e-mail. "Unfortunately they have been so tied to their broadcast and cable business distribution models and afraid of piracy that they had a hard time grasping this reality."
But the pervasive reach of the Internet offers a tantalizing opportunity for networks if they loosen their grip on control. "As broadband is becoming more available across the world, they are finally realizing that their current model is too restrictive," Bajarin said. "Instead of a U.S.-only market, they now have a world market for their content and are finally embracing this fact. The challenge will be to develop new business models, but the deal with Veoh shows that at least some networks get it and are planning for a broader world market for their content."
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