[Infowarrior] - Disney-ABC: "We understand piracy now as a business model"

[Richard Forno]

Disney-ABC: "We understand piracy now as a business model"

10/10/2006 10:57:31 AM, by Nate Anderson

http://arstechnica.com/news.ars/post/20061010-7946.html

After years of clinging to traditional business models, media companies have
finally started embracing ad-supported Internet distribution in a big way.
Yesterday's announcement that several major music labels made nice with
YouTube may turn out to be a watershed moment for the industry. Instead of
attempting to sue the company out of existence, everyone got together and
forged a mutually beneficial deal that's pretty good for consumers, too.

Now comes news from Disney-ABC that content producers have had a revelation:
instead of simply trying to squash piracy, it might be more productive to
understand and compete with it. That's the message brought by Anne Sweeney,
the president of Disney-ABC Television Group and one of the "50 Most
Powerful Women in Business," according to Fortune.

"So we understand piracy now as a business model," said Sweeney in a recent
analyst call. "It exists to serve a need in the marketplace to specifically
consumers who want TV content on demand and it competes for consumers the
same way we do, through high-quality, price and availability and we don't
like the model. But we realize it's effective enough to make piracy a key
competitor going forward. And we've created a strategy to address this
threat with attractive, easy to use ways to for viewers to get the content
they want from us legally; in other words, keeping honest people honest."

When you start thinking this way, the goal becomes offering a more
compelling product than file-swapping networks can provide, rather that
attempting (for instance) to sue the users who like your content. For ABC,
this has meant launching their own streaming media player and providing
shows like Lost and Desperate Housewives online only minutes after they air.

Earlier this year, ABC launched its player on a two-month trial basis. It
was an instant hit (almost 6 million people requested episodes) and did well
enough for the network that they elected to bring it back permanently in
September after working out a way to compensate affiliates who were being
cut out of the revenue pie.

Our own experiences with the revamped player have been positive. Though it
does not fill the entire screen, the video looks good and comes in 16x9
format. It won't replace your HDTV, but it's a nice way to get a quick Lost
fix, and the (unskippable) commercials don't detract from the experience.
It's nice to see a network like ABC responding to piracy not by locking down
its content even more tightly, but by making it easily available to even
more people.

While it's hard to compete with free, it's not impossible‹witness the
success of iTunes in both music and TV shows. You just have to offer a
compelling product at a reasonable price that is simpler to use than the
alternatives. When ABC introduced its own shows into iTunes earlier this
year at $1.99 a pop, it sold more than 8 million of them without damaging
its TV ratings at all.