NBC has announced that they are introducing a program that will let you automatically download some of their shows to your PC. With the announcement came the latest round of TiVo doom and gloom articles, that assert that this technology will some how be able to replace a DVR. While I like that NBC is being innovative and are offering more choices to consumers, I am also skeptical about the long term prospects for this one.
I suspect that NBC is hoping to build a strong subscription base for the shows, so that they can then try and pitch companies on paying for ads by the download. There may be some advertisers that will be foolish enough to accept these arrangements, but over the long run, the advertisers will figure out why it’s doomed for failure.
Right now I would estimate that I record 80 GBs of content each week. I watch a lot of it, but most of it is junk and ends up deleted. This digital waste doesn’t matter though, because there is no variable cost tied to my recording the content. The cable company is broadcasting the signal no matter what. I could delete all of it and it won’t cost them a penny more.
When it comes to downloads though, it’s a different story. Now there is no way for me to know how much NBC really pays for their downloads, but if we assume that they pay .19 cents per GB, it would cost them $15 a week, just to offer the choices and convenience that my TiVo provides. Even if you assume my estimates are high, start multiplying this out by millions and things will start to get expensive.
This wouldn’t be a problem is you were watching 80GB’s worth of commercials, but it creates huge waste, if you end up deleting most of it. As is, advertisers are upset that DVR users are skipping through 50% of their commercials, but if you assume that consumers are deleting 50% of your paid download to begin with, how will they be any better off?
In the near term, these types of developments make for great headlines, but if this gets any kind of real traction, I have no doubt that NBC will cancel the downloads or restrict demand by offering limited content. I’m expecting a long beta on this one. It’s a neat little Jedi mind trick, but I think marketers will be more savvy and will demand greater accountability.
Davis Freeberg is a technology enthusiast living in the Bay Area. He enjoys writing about movies, music, and the impact that digital technology is having on traditional media. You can read more musings at www.davisfreeberg.com.
When are the networks going to understand that not everyone wants to watch programming on a PC? I want the ability to download high-resolution cable/network programming after it has already aired, without commercials, and I am willing to pay a small fee similar to that of music on iTunes. Oh and no I don’t want or need your DRM or new-fangled downloader/viewer. I’m willing to pay for the files, if and only if I can freely watch them on my Tivo, iMac, iPod, and/or any other portable device or set top box that comes along in the future.
Ditto. Unless they have some way to let me watch this on my TV its pretty useless to me. For example, I’m using the Amazon Unbox/Tivo download service periodically, but I had never/would never install the Unbox client on my PC.
If I absolutely had to see an occaisional show this way I suppose its helpful to have it available, but that’s about it.
And advertisers should be aware that if they think TV viewers are paying little attention to the shows that are playing in their living rooms, wait until they start measuring PC viewers. I’ll probably spend most of my time surfing the web with the sound turned down.
This is a horrible mistake on NBCs part. They just pissing off their customers. Make the shows available everywhere, in all formats. See what sticks. I’ll just be buying other stuff on iTunes…
So funny, how vexed Old Media is with today’s technology. They are trying so hard to “freeze” technology so they do not have to change their business model. Like when all the blacksmiths banned together to stop the car, so they could maintain their horse shoe monopoly.
It’s going to get worse before it gets better. You can expect to see Old Media use their government lobbyists to force “TV licenses” ( like they have in the UK ) on everyone. You must have a TV license to watch TV!!! Watching The Office on the “Inter Tubes” is now illegal!
Note to Old Media: Evolve or Die
Its not TV until its on my TV.
Its not on my TV until its on my TiVo.
Its not on my TiVo at $1.99.
You are completely wrong Davis. Free downloads of episodes is the wave of the future. Probably next year. A few cents per download in costs is nothing. A couple targeted ads takes care of that with good CPM rates based on ability to target and measure affect.
By the time the download business reaches significant size, it’ll cost less than a cent per episode (structural costs from other distribution methods will not apply to downloads) and ads will bring in nice unit profit margins.