ABC's new gambit
ABC's announcement, as reported in the Wall Street Journal today, that it will begin offering its prime time programs free-of-charge over the internet is another example of the leadership role they're playing in the new media space. Does anybody really think this is just an "experiment?"
Context & Ripple Effects
ABC had already put select shows on iTunes, and it reported higher viewer ratings after that release. The reported free-web plan would extend that distribution test from paid downloads to ad-supported or otherwise free viewing.
Coverage by the New York Times and paidContent.org indicates the announcement travelled beyond the Wall Street Journal report, while the underlying plan remains reported rather than confirmed in the supplied record.
First-order effects
- ABC would give viewers a no-charge online route to its prime-time programming, reducing reliance on the iTunes download as the only documented digital outlet.
- ABC would have to treat online availability as part of its audience strategy, because its earlier iTunes release was associated with increased ratings.
Second-order effects
- Paid-download distribution faces a sharper cannibalization question: ABC must weigh any lost iTunes sales against the audience lift it previously reported from digital availability.
- Other broadcasters and digital distributors would face pressure to test free online access if ABC uses web viewing to reinforce television ratings.
Third-order effects
- If broadcasters pair free online viewing with gains in their core ratings, television distribution shifts from selling each digital copy toward using digital reach to support the larger advertising business.
- The key structural tension is bundle cannibalization: free network streams can expand reach while challenging the value of paid digital access.
The trend: Broadcast networks are beginning to use internet distribution less as a standalone download product and more as a complement to the audience for their scheduled programming.