A page one article in today’s Wall Street Journal discusses the technological threats that are developing to the television industry’s business model. One example given in the article is that Major League Baseball‘s MLB.tv video streaming service collected $265 million from 1.3 million subscribers last year, but still blocked subscribers from watching coverage of their own local teams over the Internet. The reason they did this is because any decrease in the likely audience for a game broadcast over a local cable or over-the-air channel reduces the amount that these affiliates are willing to pay for transmission rights.
The article goes on to point out that The Slingbox (a device that allows you to stream content from your television to your PC and other devices via the Internet) and the Video iPod are considered important new threats to the television industry’s business model because of the ability they give owners to place-shift their viewing. Place-shifting is potentially a bigger threat to the television industry than time-shifting because place-shifting seems to reduce the viewer’s reliance on a local television station. So, if you choose to buy episodes of Lost from the iTunes Music Store, the local ABC affiliate in your city would probably say that you’ve decreased the value of that episode to them and their local advertisers.
A lot of people think of themselves as the broadcaster’s customer when they watch a television program, but this isn’t the case. Access to viewers is a service that broadcasters deliver to their advertising customers.
A year and a half ago, Operation Gadget reported on the battle between the National Football League and TiVo over TiVo-to-Go. Back then, TiVo-to-Go was considered a potential piracy threat because the service was designed to allow up to 10 “affiliated devices” to receive stored content from the TiVo DVR. The thought was that the affiliated devices might not all be owned by people in the same family.
That debate took place before Apple shipped iPods with the ability to play back good-quality video. Now that the TV industry is sensitized to the notion of place-shifting, the loss of program value to the local affiliate would probably considered a bigger issue. [ Subscription required to read many articles in The Wall Street Journal. ]
Technorati Tags: Slingbox, MLB.tv, Lost, Video iPod, iTunes Music Store, TiVo