Monday October 6, 2008 – Antonette Goroch
After scatter shot and mostly token efforts to make their content available over the web, mainstream TV and movie programmers are finally taking the Internet seriously. The Internet won’t displace DVD and pay TV as a primary distribution channel, but most traditional content providers now recognize that the Internet will someday be a big dog on the content-distribution block.
The 2009 fall TV season marks a turning point for Internet video with a record number of new/first run movie and TV titles available, and additional ways to purchase and view content. This will go far in breaking down select barriers standing in the way of commercial success for Internet video content.
Last year, the Apple iTunes store dominated the pay-per-download movie market with nearly 70% marketshare, and was virtually alone in offering TV episodes from basic cable networks, accounting for some 90% of video downloads. This year Apple has beefed up its movies and cable network TV show library and now includes rentals. Apple is joined by the Amazon VOD store, which offers a library of first-run TV and movies for purchase or rental. Meanwhile, companies like Hulu and Joost, as well as TV networks, are offering a variety of free, ad-supported TV episodes and clips. Content providers are releasing the same libraries across these outlets, timing these releases with other pipelines (such as broadcast or pay TV). In essence, they are now conceding that the Internet is a viable incremental distribution channel instead of just a threat to their existing business.
The “net conversion” isn’t complete, however. Most web offerings fall under the “walled garden” business model and a lot of content is confined to the PC. But the shift is clear. Many mainstream content providers now have coherent strategies for Internet distribution that include high-quality content both in terms of video quality and production values. This is certain to drive usage and help make the business case for commercial video over the Internet, which will be key in compelling content providers to further loosen the reins on their online offerings.
