Wednesday, March 18, 2009

NBC doesn't want their web videos on TV

A TV is a TV is a TV, and web video shouldn't be viewed on your TV set. As companies like Boxee, Apple, and others are building devices to connect web video content to your TV screen, NBC is pushing back. For one simple reason, money. Too much of it, spent by cable, telco, and satellite distributors to NBC for placement on cable lineups. And that revenue stream is in addition to the advertising dollars for placement on their shows that NBC receives. The web hasn't built a subscription model to offset the one they have built with cable.

A direct connection of Hulu to the TV means that USA programming like Monk can be watched by viewers without buying a cable subscription. The bottom line, "NBC and Fox only get paid when you watch the TV shows on TV or cable, which gets them Nielsen ratings and subscriber fees. Internet revenues from the likes of Hulu are puny. So they can't afford to lose viewers to Web video shows on TV when they need them to be watching TV shows on TV."

But does a consumer really need Boxee to watch Hulu on their big screen TV. The answer is no. Savvy viewers are already connecting their TV screen to their PC and treating it as a monitor. As long as NBC enables Hulu, they will not be able to stop viewers from moving web content to the TV.

One might ask, but broadcast networks are free and over the air; they don't get a subscription so why care which platform a cosumer uses to watch 30 Rock. True, but each broadcaster also owns a number of cable nets, so it does still affect their bottom line. Also, web eyeballs aren't measured with Nielsen so they are not sold the same way. And they are presented with less advertising interruptions so less advertising dollars; Hulu might have some advertising, but it can't provide the same return as the linear network. Web videos are most valuable as promotional vehicles bringing new viewers to taste shows and hopefully move over to the TV to watch more. By themselves, they provide much less revenue to the bottom line.

So the NBC - Boxee feud may simply be about slowing down the inevitable. Companies are already coming up with more ways to easily access internet video content on TV. It is a slippery slope for NBC and Hulu and the subscription model they are trying to protect.

No comments:

Post a Comment