Today, we read an interesting piece in Mediaweek about the different ways TV networks are transforming their approach to delivering their shows over the web.

The article points our that ABC, which had hitherto tried to make ABC.com the single destination for watching re-runs of Lost, Desperate Housewives, and its other programs, is abandoning that strategy because they couldn’t raise sufficient revenue.  Instead, they will be doing something similar to what CBS announced recently, which is to distribute their programming over a network of partner sites.  This is in some ways a second cousin to what NBC and Fox are doing with their confusingly-named Hulu.com, which still aims to be a destination, but also will enable offsite viewing of programming.  Partners include big players like AOL and other large media portals.  

One major difference from the CBS strategy is to syndicate not just the content, but a proprietary viewing technology.  We’re not completely certain why they are doing this.  Could be a quality control effort, could be an effort to maintain itself as the primary seller of advertising against their shows.  Could be that they want to preserve the unobtrusive advertising experience they developed for ABC.com.  But a great user experience it ain’t if different content providers (as the networks now seem to be evolving toward) have different delivery technologies even when their programming exists on the same platforms.  

What’s that?  ABC and CBS content appearing on the same channel?  Wow, that seems somewhat game changing, doesn’t it.  In some ways, CBS’s or ABC’s moves in isolation seem like a modernizing of the old school affiliate model, where shows are delivered by channels not owned by the networks themselves (There are a hundred NBC stations, for example, but only about a dozen are owned and operated by them.  The others sign multi-year affiliate deals where they take the NBC programming for a fee and then sell advertising that appears on it, often jarringly local spots right next to the big national spots that the network sells.)   If you look at this like the affiliate relationship, then you might think that ABC and CBS are doing that thing where old media companies try to stick with outdated models.  But having their programming appear side by side turns that on its head.  It’s like running both Leno and Letterman.  It turns the networks into mere content sources, which is a little risky for them since in many cases they don’t own (or at least wholly own) the content.  At some point the distribution partners may find that they can make deals directly with content creators (writers/directors/actors) and the power may shift so that the tv networks are either irrelevant or, in the extreme case, bid to become the over-the-air distribution partner of the digital distributors.

Another risk in becoming a content source rather than a distribution network is the further erosion of the idea of the networks as brands.  When you’re not the distributor, you don’t have the same opportunity to promote the rest of your schedule.  You don’t have a unified programming voice.  You risk becoming more irrelevant.

Chad Stoller, our Executive Director of Emerging Platforms, pointed out that even with the networks going to outside partners to distribute the programming they are missing an opportunity: the fan community.  “Its great that the media portals are the ones being considered because of their traffic size, however, think of the power of being able to engage the various WOM drivers out there by allowing them to host and stream content — especially if you give them the opportunities to edit down what it is that they want to show.  For example, take the hundreds of Lost sites out there that link to bootleg videos of 5 second clips showing a Dharma logo.  Why not allow these sites to have direct access to the real content and then integrate an ad into it. I’ve always been a believer that ‘reducing friction’ can spark innovation. In this case, I think that if you offer the community an easier way to find and display video, they will go legit.“

Clearly, those hundreds of Lost sites don’t add up to a YouTube in terms of traffic, but they would let the fans in on the action and potentially make up for some of the promotional opportunities they may lose in the new model, as well as putting the show in the caring hands of its most avid audience.

Christian Dodd, in our Detroit office, noticed something else worth some conversation.  “I was interested in the statement from ABC that partner sites would have to use their player.  CBS was a little more ambiguous in their statement that ‘…distribution partners will have a measure of freedom because the network wants to provide them with the ability to build and design an interface that they believe will best appeal to their demographic target.’  This feels like a system where I would, on a partner site, have to open different players for content from different networks.  A more elegant solution, from my naive ‘I've spent my life watching TV not making it’ perspective, would be partnerships with a central functionality provider, like YouTube, that allows the interface to ‘disappear.’ This would also allow users to link to, post (on their own sites), and respond to content in a familiar way regardless of the originating network — all with appropriate branding and advertising appearing within video, and generating revenue based on views.  Requiring a network-specific player seems sort of like requiring an ABC branded television to watch their shows.

How will all this play is certainly an open question at this point.  I think it’s a safe bet, though, that there will likely be a lot of jockeying among the multiple partners for audience share.  In a year we’ll almost certainly see some consolidation or be able to point to winners and losers in the digital television distribution game.

Thanks to St. John O’Neil-Dunne for bringing the Mediaweek piece to my attention.

Matt Rosenberg