ABC, iTunes Deal May Break A Few Distribution Windows

In this new age of video content, the financial model for distribution windows of TV shows has been, well, thrown out the window.

In the old days--the 1990s--cable and syndication would vie for popular TV shows some four years after their initial network launches. Now those two TV distribution windows seem oh-so-analog.

Yesterday Apple's iTunes store broke new ground in making a deal with ABC Television Group that will offer consumers the ability to buy ABC shows such as "Desperate Housewives" and "Lost" for $1.99, a day after they air on television.

What does that do to the traditional value those shows have in the aftermarkets of syndication and cable? Probably not much--at least initially.

Analysts have long debated the value of small-screen viewing. Verizon's V Cast is in a similar field, where people can view video content on small mobile phone screens. Verizon's plan though is to offer--at least initially--short two- and three-minute video programs, not full-length TV episodes.



When consumers buy video from iTunes, they will be able to view not just an entire TV show on an iPod, but also on its big brother the personal computer. TV shows have been moving in this direction especially in the last two years, when programmers decided to debut shows on the Internet, like WB's "Jack & Bobby" last year, and "Supernatural" this year, before their television debuts.

"It's never been done before, where you could buy hit TV shows and buy them online the day after they're shown," said Steve Jobs, chairman of Apple Computer.

He's right. But the near term isn't about video for Apple or its iPod device. Right now Disney is the only content provider signed on to Apple's iTunes, and iTunes' main revenue efforts for its iPod product--the new video version of which was released yesterday--will continue to be with music sales for the near term.

But for the long-term, television stations, syndication executives and cable networks programming might be wondering about the next round of TV network shows that come to market looking for big rerun programming dollars.

They might not want to pay top prices for shows such as "Desperate Housewives" three years from now, because many viewers would have seen those episodes so many times before.

Small-screen viewing then will only mean smaller ratings and smaller revenues for big TV screens.

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