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The Honolulu Advertiser
Posted on: Tuesday, November 8, 2005

CBS, NBC give boost to ad-free, 'personalized TV'

By David Lieberman
USA Today

NEW YORK — CBS and NBC delivered another hammer blow to the traditional TV economic model yesterday by agreeing to let some Comcast and DirecTV customers pay 99 cents to watch certain hit shows on demand and ad-free.

Viacom's CBS struck a deal with Comcast that will make new episodes of "CSI: Crime Scene Investigation," "NCIS," "Survivor" and "The Amazing Race" available to viewers who subscribe to its extra-cost digital service and live in markets served by network-owned CBS stations.

Comcast will offer the programs for 99 cents each shortly after they air on the West Coast. The reality shows, which typically don't do well in repeats, will be available all season. Dramas will be available only until the next new episode airs, but viewers with digital video recorders can save copies.

"This is a major breakthrough. It's a precedent," says Comcast CEO Brian Roberts. "We're moving to personalized television. That's the strategy Comcast has bet on."

CBS Chairman Leslie Moonves was equally upbeat. He says the video-on-demand showings offer "an additional revenue stream without affecting the mother lode" from advertising.

NBC Universal reached similar terms enabling DirecTV to offer new episodes of "Law & Order: SVU," "Law & Order: CI," "The Office," "Monk," "Surface" and "Battlestar Galactica."

Hours after they initially air, DirecTV will transmit them to the hard drive in homes that have receivers with the new DirecTV Plus DVR, which the company says will hit the shelves this week.

Viewers will be charged 99 cents to watch an episode as often as they wish for 24 hours. It will be wiped off the hard drive once the next episode of the show airs and cannot be saved on other devices.

"This isn't an acquisition model. This is more of a rental model," says NBC Universal Cable President David Zaslav.

The decision to charge 99 cents "wasn't scientific," he adds. "It's low enough to attract viewers, and it felt like an amount that's in balance" with payments for movies and other VOD programming.

The networks and distributors will split the revenue, but they declined to discuss financial terms.

If the split mimics most VOD deals, it should pay off for the networks, even if some viewers skip the regularly scheduled airing and pay to watch an ad-free version.

That's because advertisers pay the equivalent of about 36 cents an hour per prime-time viewer, CBS research chief David Poltrack calculated last year.