Fox tries new lure for iPod crowd
Beginning this week, season premiere episodes of seven Fox Broadcasting programs will be made available for free through Apple’s iTunes store, a move that highlights the TV industry’s race to harness the Internet and try out potential business partners.
The Fox-Apple deal is designed to expose iPod users to the upcoming season of new and returning prime-time shows. Executives with the News Corp.-owned network hope that free downloads of such shows as “Prison Break,” “Bones,” “American Dad” and “K-Ville” will entice viewers to watch later installments on TV or pay to download them from the iTunes store.
The deal underscores the television networks’ predicament: They are trying to protect their lucrative businesses at a time when more viewers are catching their favorite shows when they want, thanks to TiVo and digital video recorders.
In a similar move, Walt Disney Co. said Thursday that it would make full-length ABC prime-time shows available on AOL. And Wednesday, three weeks after a well-publicized breakup with Apple, NBC Universal announced that it would offer free downloads of such shows as “Heroes” and “The Tonight Show With Jay Leno” for one week after their air date through a new service called NBC Direct.
“What we are seeing is a rather messy and inelegant fumbling into the future of video distribution,” said Tim Hanlon, executive vice president of Denuo, a consulting arm of the advertising giant Publicis Groupe.
“It’s also an admission that the television networks’ time-honored, top-down manner of distribution is not the way that people are watching video anymore,” Hanlon said. “Programmers are having an interesting time trying to figure out how to adjust.”
Fox’s William Bradford, senior vice president of content strategy, said, “I wouldn’t call it fumbling around. We are trying a lot of different things and there is a lot of learning that the TV industry is going through.”
The networks are still trying to determine whether they can make enough money by selling downloaded shows without commercial messages or whether they should focus more on offering advertising-supported programs free to viewers.
So far, TV companies have not raked in big money on their Internet offerings, at least not the enormous sums they have become accustomed to from their current customers: advertising sponsors, TV stations and cable channels.
However, TV executives are convinced that the Internet is an increasingly lucrative delivery system that will become a bigger part of their businesses, particularly as consumers who grew up using computers become the majority of the population.
“They are trying to figure out what consumers really want and how they can make money from that,” said David Sanderson, head of private equity firm Bain & Co.'s global media practice.
That’s why there has been a flurry of deals and partnerships among the various media companies since Disney announced its landmark deal to offer ABC shows on iTunes nearly two years ago.
“It’s not surprising that these networks are all casting around and winding up with different partners,” said Josh Bernoff, principal analyst with Forrester Research. Internet portals and services such as iTunes “want their premium content, and so the networks might be playing one site off the other.”
Until this week, Disney executives had believed that the popularity of such ABC shows as “Lost” and “Grey’s Anatomy” and the high-quality cinema experience offered by their online media player would draw millions of viewers to the company’s own website, at abc.com.
Thursday’s deal with AOL, owned by Time Warner Inc., marked a shift in emphasis.
Albert Cheng, executive vice president of digital media for the Disney-ABC Television Group, said the partnership with AOL would provide ABC broader online distribution of such popular returning shows as “Lost” and new programs like “Dirty Sexy Money” and “Pushing Daisies” that premiere this fall. He downplayed the switch.
“All we’re doing is exporting the ABC experience to another website,” Cheng said. “ABC.com is a platform. That platform can be distributed anywhere.’
The Fox-Apple deal comes as the broadcast networks scramble to raise awareness of their shows for the TV season that begins Monday.
The networks have invested hundreds of millions of dollars in programming. If their new shows don’t grab an audience quickly, they will be canceled.
“If they want their show to succeed, they’ve got to get it out in front of as many people as possible,” Bernoff said. “The window is very short.”
Neither Fox nor Apple would discuss the financial terms of their deal. As part of the pact, the premiere episode of a program will be available free for two weeks on the iTunes store.
“We wanted to give our viewers and consumers a new way to discover our content,” Fox’s Bradford said. Snaring marquee space on Apple’s iTunes store should help expose Fox’s shows to a younger and largely affluent audience, he said.
This is not the first time that free premiere episodes of network shows have been made available on iTunes. A year ago, NBC offered “Heroes” on iTunes. The show went on to become a big hit. CBS shared “Jericho,” which developed a loyal Internet following. Earlier this month, Apple surpassed the sale of 100 million episodes of TV shows through the iTunes store.
“Our goals are alike,” Eddy Cue, Apple’s vice president of iTunes, said of the Fox deal. “Fox is interested in selling shows and getting people to watch them on TV. We are helping promote both the buying of shows and watching of TV. If people watch a show on TV, they are more likely to buy a download if they miss an episode.”
Times staff writer Dawn Chmielewski contributed to this report.