A&E Television Networks has greenlighted plans to introduce download-to-own digital versions of its television shows on its Web sites in the first half of 2007.
The network group, which includes A&E, History Channel and Biography Channel, gave the go-ahead in part because of encouraging data from the networks’ launch on iTunes six weeks ago.
So far on iTunes, the network group has sold more than 10,000 episodes of its shows each week. Those iTunes sales provided the early indication that the A&E, History and Biography fan base is willing to watch the networks’ shows on a download-to-own basis, said Steve Ronson, executive VP of enterprises for A&E Television Networks, which also offers shows on Amazon and AOL Video for $1.99 an episode.
“That gives us the confidence to go forward,” Mr. Ronson said. “We waited for the market to be made with Apple and others.” Now A&E TV Networks is laying the groundwork to introduce download-to-own capabilities on its own Web sites-AETV.com, History.com, Biography.com and ShopAETV.com-and is the first cable network group to detail its plans to offer such a service. Fox Interactive Media plans this fall to offer download-to-own versions of Fox TV shows across its network of sites, including MySpace.
A&E’s project is part of a new movement on the part of content providers to shore up their own Web sites and Web-based sister properties as online destinations that can compete with established portals such as iTunes.
Many networks, such as ABC and NBC, are planning to offer ad-supported streaming episodes of their prime-time shows on their own Web sites. Now with Fox on the broadcast side and A&E on the cable side prepping download-to-own offerings, networks are signaling that they want a piece of the new download market too.
Networks don’t usually sign exclusive deals for online delivery of shows, making it possible to offer their programs on multiple Web sites, including their own.
Download-to-own is one component of an overall video strategy, said Mickie Rosen, senior VP and general manager for entertainment with Fox Interactive Media, the first content player to announce a download-to-own strategy.
“We want to maintain relationships with our consumers and continue to develop those relationships in relevant ways, whether it’s download-to-own or it’s streaming on an ad-supported basis on our local sites or being a promotional vehicle,” she said.
Fox plans to broaden the new business to include TV shows from other networks and studios in time.
In A&E’s case, the new download-to-own business is a logical outgrowth of its DVD business, which accounts for about 6 percent to 7 percent of A&E’s annual revenues. “We see download-to-own as the evolution of the home entertainment business,” Mr. Ronson said.
In its initial iTunes outing, episodes from marquee A&E Networks properties such as A&E’s “Criss Angel Mindfreak” and “Gene Simmons Family Jewels” performed well, as expected. But A&E was surprised that library titles such as Biography’s “Classic Biographies” and History Channel’s “Digging for the Truth” were also among the network group’s top downloaded titles since its iTunes launch in early August.
A&E started offering TV shows on VHS tapes in 1991 and evolved to DVDs in the late ’90s. A&E now sells “tens of millions” of discs from about 5,000 titles via its Web site, Amazon and brick-and-mortar shops such as Barnes & Noble, Borders and Best Buy. A&E also sells licensed content on DVD from other partners, such as Python Pictures’ “Monty Python’s Flying Circus.”
At launch, A&E’s download-to-own service will include more than 1,000 episodes of A&E, History and Biography shows and grow from there.
Pricing has not been determined but will likely follow existing industry standards at about $1.99 per episode.
Though the self-made download-to-own business is a new opportunity for networks, they do run the risk of ticking off their advertisers.
Tracey Scheppach, VP and video innovations director for Chicago-based media agency Starcom USA, pointed out that download-to-own versions are available often hours after the ad-supported broadcast as opposed to DVDs, which are released months later.
However she said she expects that in time iTunes will incorporate ad models and that consumers will choose free options to watch shows online, such as ABC.com’s full-length, ad-supported episodes of hit shows.
Mr. Ronson said advertisers haven’t expressed those concerns to A&E TV Networks. He contends download-to-own offerings-on iTunes or A&E’s own sites-build buzz around a show and drive on-air ratings.