Logo

‘Sopranos’ Muscles Into iPod Territory

Mar 13, 2006  •  Post A Comment

Tied to the long-awaited “The Sopranos” sixth-season debut, scheduled for last Sunday, pay TV network HBO has started making its first “Sopranos”-related content available on iTunes.

The pay cable network is offering numerous video interviews with the cast, recaps, behind-the-scenes documentaries and audio “words of wisdom” clips, which will be updated throughout the new season. Complete episodes of the mob series are not available for the time being.

Without fanfare, Time Warner-owned HBO also has recently added on iTunes similar supplementary content in support of its new polygamy drama “Big Love,” its historical epic “Rome” and its hipster comedy “Entourage.”

All the HBO content is available for free on the site. HBO and iTunes declined to comment.

Last October HBO wooed Yahoo Senior VP Jim Moloshok for the newly created position of president of media ventures. Since then, the network quietly has begun carving a strategy for television’s new digital order. In addition to the iTunes pact, expected to be announced this week, the network last week announced its first new media deal, offering content from its popular series on Cingular cellphones for $5 per month.

These initial moves come at the same time fellow premium service Showtime is entering the new media fray trail-blazed in recent months by major ad-supported broadcasters and basic cable networks.

Last month Showtime placed entire episodes of “Weeds,” “Sleeper Cell” and “Fat Actress” for sale on iTunes, and announced it will also add boxing.

Several of the Showtime series quickly landed among the top 20 most-downloaded videos on the service, and sources estimated the network’s first three weeks of sales totaled about $400,000. Showtime declined to comment on its iTunes sales figures.

The approaches of Showtime and HBO to the iTunes space differ from each other as well as from their basic cable and broadcast brethren.

For example, when ABC makes an episode of “Desperate Housewives” available for the standard iTunes video price of $1.99 the day after broadcast, the network’s advertising revenue for the episode premiere in prime time is not directly affected, since the iTunes run is after the fact.

But for premium cable services, the game is more complex.

About half of a premium series episode’s first-run viewing occurs during repeats after the premiere, with episodes running about eight times throughout its premiere week.

Premium series also are often made available via video-on-demand. Subscribers rarely are unable to catch any given episode, which raises the question of demand for premium series episodes on new portable platforms such as iTunes.

More crucially, networks like HBO and Showtime depend on the allure that comes with the exclusivity of their series to drive subscriptions. If consumers can cherry-pick content, they might do so in lieu of subscribing to the main service.

In other words, if customers can download an entire 13-episode “Sopranos” season for $26, they may refrain from subscribing to HBO year around.

According to experts, premium networks would be well served by selling content on the service despite the risks.

“The premiums need to be careful that their viewers don’t cherry-pick programs then drop subscribing for the entire month, but I think the risk is pretty low,” said Will Richmond, president of Broadband Directions. “And if you’ve never watched Showtime and are curious about ‘Weeds,’ you can download an episode and sample the content. It becomes like a promotional opportunity.”

A Showtime spokesman agreed. “The iTunes downloads are creating a new revenue stream for the company while expanding the universe of consumers who can view our shows through this platform,” he said.

But HBO has been more cautious about going full tilt into selling downloadable episodes, preferring for the moment to stick with free clips. One reason, sources said, is that HBO has more subscribers at stake-28 million compared with Showtime’s 14 million. HBO also has a lucrative DVD and syndication aftermarket that accounts for about 20 percent of its revenue.

HBO already has plenty of successful distribution outlets for its content and is less anxious to add one that’s relatively untested-especially if it could threaten to cannibalize its pricier aftermarket efforts. Amazon.com was offering the complete fifth season of “The Sopranos” last week for $69.86, more than twice the going per-episode rate on iTunes.

“The pay networks want viewers to be subscribers to the pay service,” Kagan Research analyst Deana Myers said. “HBO especially has focused on the exclusive availability of its original series on HBO. They have sold series later on DVD and done very well. I can’t really see them wanting to give up that revenue stream or the exclusivity of HBO to subscribers.”

HBO was similarly apprehensive about diluting its perceived value by entering the syndication market before eventually diving in with the 2004 sale of “Sex and the City” to TBS and the ultimate sale to local stations.

But Kaan Yigit of Solutions Research Group noted entire HBO episodes are already available for downloading online, albeit illegally.

“I can guarantee that by 10:01 this Sunday, you’ll be able to download the first episode of the sixth season of ‘The Sopranos’ on any number of [file-sharing] sites,” Mr. Yigit said. “While cannibalization is always an issue, on a net basis, iTunes downloads would be complementary and incremental.”

In a related poll released in January, Nielsen and Nielsen//NetRatings conducted a survey of iTunes users to determine their habits and preferences. They found the average iTunes user is male, prefers Wired magazine to Rolling Stone and is most likely to watch Cartoon Network … and HBO.