NBC's Troubles

NBC has announced that it will open its own download site for it’s programs after a dispute with Apple over the price and DRM for its programs on ITMS.

There are a lot of people who think NBC is mad to take their shows off of ITMS and maybe they are, but I think NBC and others are bound to explore their options in this brave new world.

We call NBC, CBS, ABC, and others “networks” because in the old days they had to worry about distribution because of the limits of technology (VHF television has a 50 mile or so radius). So, NBC had to have a local affiliate to distribute their shows to various parts of the country.

This all broke down with cable, when cable companies began providing distribution without any shows of their own (to speak of). Of course the old model survived for the “networks” but new “channels” like ESPN, Bravo, Lifetime, and others sprang up who have no local affiliates. Some local affiliates, like TBS, even became national channels through cable distribution.

The networks don’t need local distribution anymore. We’re beginning to networks offer their shows directly to audiences over the Internet. That’s what the NBC/ITMS story is all about.

So if NBC isn’t a network, what is it? An aggregator. NBC, CBS, ESPN, and others aggregate new and old video entertainment into a package, wrap it in a brand, and make money from the aggregations. This is essentially editorial in nature. They hope they’ll select programming that makes you trust their brand as a good place to go to be entertained.

As an aside, this is very much what IT Conversations does. We’re not a podcast, but rather a podcast aggregator who exercises editorial control over what shows appear on our channel.

More to the point, it’s also the business that Google, Yahoo!, Apple (with ITMS), and others are in. The Internet has given the “networks” a lot of competition that they didn’t have before as the price for virtually free distribution and unlimited shelf space (the longtail phenomenon).

There are plenty of reasons to believe that editorial control of program selection is a vital, important function, but it’s not clear that the big guys will be the ones who win. Back to IT Conversations: it’s niche player in a niche market but to the thousands of loyal listeners, it’s just what they need for that small area of their world.

The point is that you don’t need loads of money to get into the aggregation business anymore. Move over NBC, iTunes is the least of your problems.

Posted by windley on September 20, 2007 12:17 PM