Steve Jobs' revolution in content delivery via Apple's
NBC Universal is reportedly following Disney's lead in hoping that iPod users will be willing to fork over some green for the privilege of watching network shows, including Law & Order and Surface. Late-night comedians Jay Leno and Conan O'Brien will see their respective programs offered on Jobs' platform, too. Disney's ESPN already supplies audio to the iPod, but ESPN/ABC Sports President George Bodenheimer was recently quoted as being open to the concept of placing some of its visual assets on the device's menu, too.
ABC and NBC Universal are more than willing to experiment with this burgeoning new platform, and rightfully so. Down the line, the iPod cult can generate incremental revenue streams for the networks and their media-conglomerate parents (not to mention a ton of brand equity). The key here is not to fumble the ball. As Rick Munarriz implied in a previous commentary, it's not so much the current popular content that will be so compelling. It's all the content that ends up getting lost in the shuffle, never finding its way to syndication or DVD release. Monetizing rejected pilots by selling them to iPod users would be one example of such an opportunity.
But perhaps another angle to the whole iPod video thing is the ability to monetize all kinds of "extras." Consumers love extras: commentary tracks, documentaries, deleted scenes, just to name a few. This stuff is addictive for many people. By now, we've all seen at least one movie on cable with a little ticker below the action describing what was going on behind the camera at that particular moment. Some would argue that, in a sense, studios already make money with these extras because they help drive sales. Nevertheless, I wonder if a more direct revenue stream could be derived from running them on the iPod.
But will the profits from this opportunity be reaped in an optimal fashion? It's all about the price. Is $1.99 too cheap for an extra, or is it just right? What about more expensive selections? Over at the unofficial Apple weblog, it seems that the price of certain products did not receive an enthusiastic response.
And how much of a cut will talent eventually demand from this new gravy train? Obviously many of the big guys already have deals covering newly minted distribution paradigms. But as the revenue pie grows, the percentages demanded could grow accordingly. The initiative has already delivered 3 million video downloads (remember when the first million was so sweet?) in a short period of time, so it will be interesting to see how agents eventually view this technology.
It's too early to tell exactly how much the major networks will eventually profit from iPod commerce. Just think of the possibilities for entertainment giants like ABC, NBC, News Corp.'s
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