As a new series of on-demand television deals have been struck between network TV, Web portals and cable operators (basically conceding that the digital video recorder is on its way to displacing the
TV business model as we know it)
Business Week asks, "where's the business model?" Well, as
Business Week may recall, the actual money-making part often comes later--look at Google, who
developed its search engine years before implementing its multibillion-dollar search advertising program. NBC, CBS, ABC, Warner Bros., Apple, Yahoo!, AOL, TiVo, MSN and the Associated Press have all
announced deals in the last month to convert their content to the on-demand lifestyles of their consumers. Why the sudden rush? Well, for one thing, marketers don't like to pay more for smaller
audiences who have access to devices that tune out their messages. Will this on-demand programming work? Long term, probably not, because while $1.99 per show would cover a hit show like "Desperate
Housewives (which currently makes about 45 cents per viewer per episode), it would not cover the countless duds thrown out by the big networks and the teams they have to pay to make those shows
happen."What we need are new revenue streams," notes CBS chief Les Moonves. Indeed, it will be interesting to see how this shakes out.
Read the whole story at Business Week »
