Comments on: TV has license to kill movies at iTunes, Netflix

Apple and Netflix are being treated as if they compete against TV broadcasters. That's why some film titles are disappearing from iTunes and Netflix.

[luomat]

The "w" in "Macworld" is never capitalized.

Feel free to delete this comment if the article is edited to correct this. I would have sent it via email if I could find an email address for the author.

[knowles2]

Well why they are busy sorting out their business out, I will just stick to services which provide films that are available all the time and DRM free. And I can transfere to as many devices as I want.

Please post a story when they have sorted out their problem. Have they learnt anything about watch happening in the music industry.

[Robot-Killer-Bee]

Right now, advertisers still spend absurd amounts of money for commercials on popular broadcast shows, and that's where a huge portion of the revenue comes from, so it makes sense for them to cut off all other sources to force people to see it on tv so they can then bring the numbers to the advertisers and say "Look how well this show is doing! Give us your money to advertise during this show!" In the minds of the advertisers, it's the most effective way to reach the most number of people in the shortest period of time, and they're willing to pay a premium, which the broadcasters capitalize on, and thus, they pay lots of money for an exclusive license to a popular movie/tv show from the appropriate distributor.

Say, they get an average of $200 000 a minute, for say 15 minutes of commercials an hour (I'm being generous, for a prime hit tv series, it's upwards of $300-700 thousand for 30 seconds with 18 minutes of commercials). That's 3 million dollars in an hour for that time slot! If that's done 4 hours a day for 52 weeks, that's 624 million for a year. For a single hour long program running half a year, that's still 78 million in advertising revenues. Once again, I'm being generous with my calculations.

Now you can see why having exclusive rights would drive the price of advertising space up. If everyone has to watch tv to see the show, then the number of viewers goes up (or stays at a high level), and justifies why advertisers are willing to pay such huge premiums. And why maintaining this revenue stream is so important to both distributors and broadcasters, if they're not one and the same.

So when's it going to change? There won't be any change until the advertisers (and I mean most of them, if not all of them) realize that their ads aren't reaching people despite the numbers shown to them, and they find a better way to do it digitally, and like dominoes, the main revenue streams of distributors and broadcasters will dry up.

That, I think, is the problem that's slowing the transition, similar to that which drives up the salaries of A-list celebrities. If one company doesn't want to pay the outrageously inflated price demanded, someone else will step up and pay it, and it will not go down until everyone agrees to not pay.

Yay free market!

[5errr]

interesting article. i didn't realize it worked like that.

[no1gun_n_roses]

ah, i don't interested in this information.
the 1st comment :D

[mdsudan]

Once the TV/Distribution companies have setup/acquired business models similar to AppleTV, Netflix, Youtube and figured a way to pipe ads thru them...this will probably align with wide availability of really highspeed broadband...you will see the content. my 0.02c...

[htheater]

Interesting and informative article! Being in the CE business and a dealer for some of these services (Netflix via DVD Players, Vudu and AppleTV), I was aware of most of this and suspect of others, so it was good confirmation. It is also good to get this info out to the public so that they understand what is going on as much of this is the old school thinking that got the music industry to where it is today.

My main reason for making a comment is that you failed to mention VOD from DISH (including limited 1080P), DirecTV and Vudu (a lot of 1080P). Are you aware of their products and services? I ask because you also stated that the Internet services didn't compete with HD quality. Nothing could be farther from the truth.

I watch Vudu on a Runco VX-22D Autoscope that projects onto a 160" wide 2.35:1 Stewart CineCurve. It gives an excellent picture and will easily show any performance issues. I have done several comparisons with Vudu HD vs. DISH & DirecTV and Vudu is every bit as good. Comparing BluRay to Vudu's HDX gives similar results (as it should since it is 1080P/24 and uses the same codec).

Doing these same comparisons with AppleTV reveals several performance issues on the AppleTV so we only recommend and sell it for small LCD and plasma screens or to use as a whole house source for slide shows of family pictures and events.

Vudu is also the content leader with over 13,000 titles, 1,400 of them in HD. Compare that to AppleTV and their 600 HD titles (most of these are TV shows) and even to BluRay at under 1,100 titles.