One Month Changes Entire TV Universe

Published November 15, 2005

| Associated Press

"Desperate Housewives" on your iPod. Jay Leno's monologue on your cell phone. Brian Williams delivering the night's news on your computer. And "CSI: Crime Scene Investigation" available whenever you want to watch it — not just Thursday night.

Each of those developments became possible in the past few weeks, part of an extraordinarily tumultuous period in TV.

The autumn of 2005 will doubtless be remembered as the time when all assumptions about the rules of television were thrown into the air and scattered, with no certainty about what happens when they land.

The most shocking event clearly was Apple's deal with The Walt Disney Co. in October to make reruns of "Lost" and other programs available for downloading to iPods for $1.99. In less than three weeks, Apple said a million videos were sold.

"That's a significant amount of money," said Rob Enderle, an analyst for the Enderle Group. "I honestly believe that's going to change a lot of minds in terms of providing programming for this medium."

Some worry this service will make people less likely to watch these hit shows on television. But many in the industry believe fans who may have missed an episode represent the biggest market. So far, there's no evidence that fewer people are watching new episodes of "Desperate Housewives" or "Lost" because they can download it later on iTunes.

At the very least, the preliminary results show the idea of portable TV has some appeal.

The big question is how many people will gravitate toward watching TV on iPods, computers or cell phones when a big-screen television is waiting in front of the living room couch.

That remains unanswered, but it hasn't stopped an explosion of Internet channels or programming offerings this fall — seemingly a new announcement every day.

Several of the MTV Networks have launched affiliated broadband sites. 50 Cent made a concert exclusively available on MTV Overdrive, VH1 started the VSpot stream, kids can watch cartoons on TurboNick and Comedy Central's Motherload began operating Nov. 1.

NBC began offering a same-night replay of "Nightly News" online, the first network news broadcast to take that step. The Food Network starts a Web-only series with chef Dave Lieberman next week. HGTV debuted "My First Place," a series about young people moving into their first homes, on the Web before TV. PBS made NerdTV, a series about high tech pioneers, available exclusively on the Internet.

America Online anticipated only a few hundred applicants for "The Biz," its online-only music talent contest. Instead, it got 9,000. On Monday, AOL announced a new initiative to show old TV programming.

AOL's successful Webcast of the Live 8 concert last summer opened many eyes to the possibilities of Internet TV, and so did simple demographics.

About 35 million homes now have broadband access (compared to 110 million homes with TVs), and about half of those online users say they've watched video online, said Josh Bernoff, principal analyst for the Forrester Group.

Just as importantly, advertisers have warmed to the medium, and realize they can effectively present online commercials not that different from what's already on TV.

Some of the biggest early customers for Internet TV are transplants, Enderle said. They're following sports teams from cities they departed or, if they're immigrants, catching the latest news from the home country.

Comedy Central is using Motherload primarily to showcase stand-up comedians and other short-form comedy that wouldn't necessarily fit on the TV network. It shows highlights of "The Daily Show," but you still have to watch TV to get the full Jon Stewart experience, said Michele Ganeless, Comedy Central's general manager.

Most people don't have the patience to watch more than four or five minutes of Internet programming at a time, she said.

"I think that will change over time," she said. "I think right now, based on my personal experience, the computer isn't necessarily set up in a spot in the home that is comfortable for long-term viewing."

For the most part, Internet TV is still "like the minor leagues," Bernoff said. "It's stuff that wasn't good enough to get on the air, or too short to get on the air."

Likewise, programming on cell phones is in its infancy. But NBC's announcement earlier this month that it is collaborating with Sprint to make Leno's monologue and comic sketches available on the phone is a sign of recognized potential.

Sprint has been the most aggressive in providing programming, working with MobiTV to make a variety of news, sports and comedy programming available on their phones, said Phil Taylor, an analyst for Strategy Analytics Global Wireless Research. About 500,000 people subscribe to a cell phone programming service in the U.S.; market penetration is more advanced overseas.

Just like on laptops, short bites of programming are most popular. So is adult fare, he said. Cell phone video is likely to spread more through convenience than any real consumer pressure, he said, because cable or cell phone companies are likely to bundle this with other services.

"I don't think usage of the mobile phone TVs will come anywhere close to the home television as a principal viewing device," he said. "But the evidence suggests that it's a handy way of spending time when you're waiting two minutes for a bus or for a friend at the bar."

Ultimately, this fall's most far-reaching development may be last Monday's dual announcements by Viacom Inc.'s CBS and NBC that it would begin selling replays of its most popular shows on an on-demand basis through Comcast Corp. and DirecTV Group Inc., respectively.

It gives a tantalizing peek into a television landscape where viewers can decide when to watch their favorites. While the Internet and cell phone choices work around the margins of television fare, these deals involve the most popular programs on television.

"Mark down the date," Bernoff wrote after the announcement. "Today is the beginning of the end of the television schedule."

Telephone companies SBC Communications Inc. and Verizon Communications Inc. are also preparing to roll out Internet Protocol, set-top technology that could allow consumers to choose from among multiple camera angles while watching a program or search the Internet for information about the actors.

It all foreshadows a completely upended business environment, where TV networks can get revenue directly from consumers instead of the advertising time they sell. Business deals of all sorts will have to be rewritten to reflect all these new distribution methods. Expect some nasty negotiations or lawsuits.

Many of the new ventures are elaborate test drives. Bernoff expects a pause from the frantic series of announcements as media companies gauge consumer interest in all the options and check how it affects traditional TV viewership.

The technology and changing consumer habits have converged at a time these companies are skittish. They're eager to be on the cutting edge but, more importantly, they don't want to be left behind.

The transition to a new television world has only just begun.

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