December 6, 2005 1:46 PM PST
Commentary: iTunes gets more TV
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NBC teams up with iTunesDecember 6, 2005
Apple Computer announced on Tuesday that it has reached 3 million video downloads on iTunes and will be adding a bunch of NBC Universal shows, including "Law & Order," "Surface," "The Office" and "Battlestar Galactica." Not mention Conan O'Brien and Jay Leno.
As we said before the CBS-Comcast video-on-demand deal in November, the rest of TV is going to come flooding into iTunes and also into alternative distribution including cable video on-demand.
Take a close look and you'll see that the popular shows getting into iTunes are produced and broadcast by the same company. That's why "The West Wing" isn't in there--it's produced by Warner and broadcast by NBC.
I'm reminded of what happened at the beginning of the online music business, when the labels told me that the contracts were difficult to track down and that it would take a long time for all the artists to accept getting their music distributed online. Then iTunes became a hit and the money started flowing. And somehow, all those contractual questions got washed away. Hmm....
If iTunes actually makes some money (and 3 million video downloads means $6 million to divvy up already) you'll see the contractual issues get resolved in video, too. All Warner and NBC need to do is figure out how to divide up the dollars. And once a few of these deals get done, the precedent will be set, the rest will follow, and the floodgates will open.
The lesson here for other forms of distribution--cable video-on-demand, streaming, mobile phones--is this: Start with some popular content and prove the business model. Once the money starts flowing, the rest of the content will follow.
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