Two announcements this week gave a glimpse of where we may be heading in the world of online video and movies, and it is making some broadcasters and movie studios very nervous (what else is new). The first was NBC's announcement that it was launching the National Broadband Company (NBBC). NBBC will be an advertiser supported on-demand broadband video service that will include a good bit of NBC network programming, as well as the programming of some local stations and other partners like the History Channel. In a very smart move, NBC has given its affiliates a 1/3 ownership stake in the venture and a share of the advertising revenues.
Sounds good to me. But what does a service like NBBC mean for those silly “distant signal” laws that protect local broadcasters from competition from stations outside of their service areas? As I have written about previously, these are the laws that have Echostar facing an injunction that would force it to terminate distant service to 800,000 customers who are currently receiving these signals legally. In a nutshell, NBBC and other services like it render distant signal laws worthless. NBBC will allow me to watch programming from a “distant” television station regardless of whether my cable (or satellite) provider is permitted to do so. Seems it is only a matter of time until the other networks follow suit. So if networks and affiliates are free to send their programming all over the contry via the Internet, why should cable and satellite providers be prohibited from negotiating with individual distant stations to provide programming to their subscribers?
The second announcement was that Apple will now be making movie downloads available through its iTunes movie store. But despite the popularity of iTunes video store, only one studio — Disney — will offer movies through the new service. No surprise there — Apple Guru Steve Jobs sits on Disney's board and is its largest individual shareholder. But the New York Times reports that other studios were reluctant to sign up because they 1) thought the $14.99 price was too low and 2) didn't want to eat into Holiday season DVD sales. Perhaps they did not want Apple to compete with the other download services in the marketplace that sell movie downloads for more than the price of a hard DVD, with fewer features, and in some cases as high as $30. As the Times reports, those services “have not been popular.” Ya think?
Anyone want to take bets about how long it will take the other studios to fall in line?