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Commentary: Dismantling the TV schedule

Networks' 99 cent on-demand and pay-per-view deals mark a new day for getting TV shows to the masses.

Commentary: Dismantling the TV schedule
By Forrester Research
Special to CNET
November 8, 2005, 1:00PM PT

By Josh Bernoff and Jim Nail

TV distribution has been cracked wide open.

For 99 cents, you'll now be able to watch CBS hit shows on Comcast On Demand and NBC Universal programs on DirecTV Pay Per View. The result: Digital cable and on-demand usage will surge. And the TV schedule will soon be as irrelevant as last night's news.

CBS announced on Monday that it will make four hit shows--"CSI: Crime Scene Investigation," "NCIS," "Survivor" and "The Amazing Race"--available the next day on Comcast. On the same day, NBC Universal agreed to make several of its shows, including "Law and Order: Special Victims Unit," "Law and Order: Criminal Intent," "The Office" and "Surface," available on DirecTV pay-per-view and the DirecTV DVR for one week after the shows air. Both will cost 99 cents for consumers.

related story

Networks unveil separate plans
that will allow viewers to
watch prime-time shows at their
leisure, without commercials.

As we predicted, ABC's video iTunes deal for "Lost" and "Desperate Housewives" presaged a flood of new TV distribution. Now all broadcast networks will aggressively pursue new channels. ABC and NBC Universal will likely jump into cable on-demand distribution within the next two months--the only challenge now is agreeing on financial terms. Fox will almost certainly match NBC Universal's deal with Fox's sister company, DirecTV. Once these deals are in place, deals with other operators--not just Cox Communications, EchoStar Satellite and Time Warner Cable, but also SBC Communications and Verizon Communications--will follow.

Here's how things will soon play out:

• Ad-supported on-demand programs are next. At 99 cents, next-day viewing is restricted to those who are willing to pay. Just as advertising supports live TV, we also expect it to support on-demand programs--perhaps with a single sponsor per program, especially once consumers can click on ads to see more. Within 12 months, look for free on-demand programs to debut on Comcast, with ads sold by both Comcast and its network suppliers.

• Digital cable signups will soar. Popular shows on demand will become the most attractive element of digital cable, especially once shows become available for free with ads. Once operators like Comcast have flushed out all the consumers who are willing to pay high digital cable rates, they'll roll out a cheaper digital-cable tier with $70 all-digital set-top boxes. Satellite won't be able to match cable features with less convenient pay-per-view or DVRs with limited capacity. The result: Cable will beat back competition from satellite TV and will gain a lap on the still-emerging TV offerings from telecommunications companies.

• The TV schedule will become obsolete. Mark down the date: Today is the beginning of the end of the television schedule. Look for networks to repeat shows late at night and on weekends for viewers without on-demand access. Who loses? Weak shows now benefiting from strong lead-ins and syndicated outlets that will find reruns worn out by the time they get them.

© 2005, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.