The demand for Internet video content by advertisers, along with the challenge facing the TV networks of losing broadcast eyeballs, has created a powerful incentive to bring TV content to the Web.
After some experimentation and deciding which model to choose, the networks are focusing primarily now on streaming their hit shows for free online with an ad-supported business model. That's a change from the pay-per-episode download model they've been using for some time.
The large number of deals being announced are hard to even keep up with as numerous partnerships are revealed almost daily.
“This is definitely something that’s here to stay,” said Albert Cheng, executive vice-president of digital media at the Disney-ABC Television Group. "We have a sound economic model. Our next phase is to build on top of that." Last week Disney (DIS) announced a distribution deal with AOL (TWX).
The major concerns about cannibalizing their broadcast audiences has been addressed through experimentation, and has been found to not be the case, so now they're going ahead full throttle to spread their content online.
Advertisers are thrilled to hear the news, as they've been lining up to find places to brand their wares on the Internet. This will give them a huge opportunity.
It will also help advertisers in that it will provide them with guaranteed viewing, in contrast to the uncertainty of DVR viewing; although that's starting to be measured as well.
In a way, the free online streaming will be similar to having a DVR without needing to use it; at least if the show wanted to watch is being streamed online. The networks also think it may help decrease demand for pirated content, through offering their own free content.
It looks like the best model has been figured out by the networks. Now we'll see extraordinary increase of video on the Internet, as I talked about here. It'll be interesting to see if the infrastructure of the Web will hold with this extraordinary increase.
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