|Using an ad-supported model, ABC plans to make shows like 'Lost,' 'Desperate Housewives' and 'Grey's Anatomy' downloadable to consumers for free.
Bear Stearns conference
“Mike Shaw [ABC's president ad sales and marketing] announced today we are going to take a product to market in May," Mr. Iger said at the Bear Stearns media conference in Florida this week. "Viewers will have the ability to access shows such as 'Lost,' 'Desperate Housewives' and 'Grey’s Anatomy' on ABC.com. They will be ad supported, free to the consumer.”
Ads that accompany the video offering would not necessarily be the same as those that appeared during the show's broadcast, he said.
Mr. Iger said Disney wanted to try a variety of business models for its product, whether subscription or advertising supported. ABC shows are also offered via Apple iTunes and iPod platforms for $1.99 a pop. Those shows come without ad involvement.
'New direct commerce opportunities'
Mr. Iger said Disney was looking to create a number of revenue models but because the company did not wish to turn its back on the ad community, it would create new opportunities for them.
“There is so much greater consumption of media, the opportunity for advertisers are greater; look at what Google has managed to do,” Mr. Iger said. “Our job is to create the new networks and new direct commerce opportunities.”
So far greater availability of ABC's shows via Apple’s iTunes does not appear to have dented the shows' ratings, something advertisers had feared might happen if consumers could find them elsewhere at anytime. For the week of Feb. 20, “Grey’s Anatomy” ranked No. 6 in the Nielsen Media Research ratings, watched by 24.7 million households, just behind coverage of the Winter Olympics Feb. 23.
Gary Carr, senior VP-director of national broadcast at TargetCast TCM, New York, said: “The one thing advertisers are worried about is whether people are watching the commercials and are they watching the shows?”
Not yet selling new platform
He said ABC not yet started selling the new platform, but noted that CBS, which has a deal to offer its hit shows via Comcast’s video-on-demand platform, does so with the advertising that runs on the linear network intact.
“Its good that they’re all trying different things. They’re testing a lot of models that can generate additional revenues,” he concluded.
NBC also offers many of its network shows on the iTunes platform -- "The Office" is one of the top performers -- while Fox is offering two network shows, "Prison Break" and "24," through satellite sibling DirecTV's VOD system for 99 cents.