ABC's bold experiment: free TV on the Internet


In a bold move that reflects a revolutionary realignment taking place in American media, Disney-ABC will begin next month offering four of its most popular series, including Desperate Housewives and Lost, on the Internet for free. In doing so, the network will become the first to offer prime-time programming to Internet users without asking them to pay for it.

Dubbed "experimental" by the media conglomerate, the strategy addresses viewers' growing desire to choose when and where they watch their favorite shows and the need of advertisers for their commercials to be seen by the targeted audience.

ABC will offer the free online programming, which also will include Alias and Commander in Chief, in May and June, network executives announced yesterday. Although the plan holds out to viewers the promise of more control over how they watch TV, ABC online consumers - unlike users of TiVo and some other on-demand services - will not be able to skip commercials.

The concept is proving appealing to television's largest advertisers. Already 10 major corporations, including AT&T and Toyota Motor, have signed on as ABC's online sponsors. But as appealing as the plan might be to advertisers and - for different reasons - to viewers, it also could alter drastically the relationship between networks and their affiliates, with grave financial consequences for local stations.

"This could turn out to be a defining moment in the relationship between network television, the Internet and affiliates," said Douglas Gomery, a media economist at the University of Maryland, College Park.

"This is Bob Iger, the new Disney [CEO], saying, `I'm not tied to the old television model. I understand that the Internet's important, and I want to get to these young people who use it. So, let's take free television to the Internet.' It's a bold move, but it's also logical and evolutionary," Gomery said.

In October, ABC began offering episodes of hit shows via iTunes the morning after each aired on the network.

But the difference between the iTunes plan and the new online availability is fundamental: Instead of paying $1.99 to download each program, consumers may watch the shows at no cost. The move, analysts said, signals that ABC is attempting to adapt for the digital age its 60-year-old business model - in which advertisers sponsor prime-time programming.

"ABC is moving from the pay-per-episode model to the free episode model," said Henry Ellenbogen, an analyst for T. Rowe Price.

"The second part of that involves the networks and advertisers working together to test the waters [online]," he said.

"It's an opportunity for us to learn more about a different model," Anne Sweeney, president of Disney-ABC Television Group, said in a panel discussion yesterday at the cable industry's annual convention in Atlanta. "None of us can live in a world of just one business model. This is about the consumer, and how the consumers use all this new technology. It's consumer first, business model second."

Analysts predict that ABC will make more original programs available online - and that other networks will quickly follow suit. In addition, the networks soon will begin creating shows exclusively for the Internet.

"It's just a natural evolution," said Jonathan Taplin, an adjunct professor at the University of Southern California's Annenberg School for Communication.

Taplin, who holds two patents for video-on-demand technology, speculated that advertisers would be drawn to the service because they can get a better idea of who's watching - and tailor their ads accordingly. It's the beginning of a move away from the traditional 30-second ad targeted at large audiences, he said.

"Disney can give advertisers very specific demographic information about each viewer, so you might get a very different ad than your wife would and a completely different ad than your teenage daughter would," Taplin said.

Viewers already have indicated their willingness to watch TV shows on their computers. Apple's iTunes video store has sold 15 million programs since its debut last year. And - a year-old site where people can post homemade programs - averages 25 million hits per day.

"There are people out there who are comfortable watching video on the Web," Taplin said.

A half-dozen students interviewed yesterday at the Johns Hopkins University said they would use the ABC service - in some cases as an alternative to illegally downloading TV shows from other sources.

"I would use it for all the shows I miss," said Christopher Smith, an electrical engineering major from Boston. "It's great because even if you forget to record the show, you can still watch it. It's nice that it's free."

Greg Harris, a sophomore from Fairfax, Va., said he downloads Family Guy and Lost from an illegal site. "I would prefer to download them legally," he said.

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