Prime Time On Demand: NBC, CBS To Offer Big Shows For A Fee

NBC Universal and CBS made separate ground-breaking programming deals for their prime-time shows, significantly giving so-called video-on-demand services the boost supporters always said it needed--the ability to access big-rate prime-time programming.

NBC first announced that it would have its prime-time shows distributed commercial-free in an on-demand format to DirecTV subscribers, through the satellite provider's new DVR recorder, who would pay a 99-cent fee for each episode.

Later in the day, CBS announced perhaps an even bigger agreement for most of its big prime-time shows to be distributed to Comcast digital cable subscribers. The difference here is that CBS commercials will continue to run on those programs. Subscribers will also pay a 99 cent fee. Comcast is the largest U.S. cable operator.

In the NBC deal, subscribers can get episodes of shows for 99 cents hours after their premiere from NBC's broadcasting and cable networks, such as NBC, USA, Bravo, and the Sci-Fi Channel--for programs including "Law & Order: SVU," "The Office," and "Monk." Episodes of the shows will remain available for one week.



CBS' agreement with Comcast makes the network's biggest shows available on an on-demand basis. Shows include "CSI," "NCIS," "Survivor," and "The Amazing Race." This will be available to Comcast digital cable customers in markets served by CBS-owned TV stations, including Los Angeles, Chicago, Dallas, Philadelphia, Baltimore, and some outlying areas of New York City.

Both NBC and CBS shows will be available early next year through their separate on-demand deals.

NBC's on-demand deal is different than CBS' deal, as NBC programs will run without commercials. That's a necessary business consideration for NBC's existing distributors since DirecTV is a national service. NBC wants to avoid any conflict with its broadcasting and cable affiliates who sell local advertising time on these shows. But CBS doesn't have that problem--because Comcast is running on-demand CBS shows only in markets where Comcast on-demand service exists and where CBS owns stations. So there is no conflict.

Currently, the VOD customer base is small--and not much of a threat to broadcasting and cable affiliates. But longer-term, say analysts, it is only a matter of time before these VOD services will be siphoning away viewers.

Comcast has been prepping its VOD service for some time, already offering digital cable customers almost 4,000 on-demand titles--mostly movies, children's shows, sports, and music--at no extra charge. Comcast has logged more than 1 billion program views this year.

For the NBC deal, DirecTV's new DVR device comes with special interactive software that is made by NDS Group Ltd. DirecTV is rolling out the new device--which began shipping this week--changing over from its older TiVo-made DVR machine. DirecTV has been slowly disentangling its TiVo partnership over the last several months. Both DirecTV and NDS are controlled by media conglomerate News Corp.

The new DirecTV DVR comes with a hard drive that holds 160 hours of programming--of which 100 hours are available for subscribers to record programs, and the remaining 60 hours are to be used by DirecTV to download programs that can be viewed for an extra fee.

DirecTV says it is talking to other networks about selling shows the same way.

Recently, ABC offered several episodes of its shows, including "Desperate Housewives" and "Lost," for $1.99 each via the iTunes Music Store from Apple Computer. ABC is offering these episodes the day after their network debut. CBS announced last week that it would stream commercial-free episodes of its new show "Threshold" over after its network run.

Separately, TiVo announced a deal that would enable subscribers to program their DVRs from Yahoo! via the Internet.

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