iPod: TV’s Odyssey: The Gadget That Transformed TV

Oct 9, 2006  •  Post A Comment

A year ago this week, a gadget changed the way we think about television.

Apple Computer CEO Steven Jobs and Walt Disney CEO Robert Iger took to a stage Oct. 12, 2005, and told the world it could watch ABC TV hits on the iPod media player. The announcement accelerated a rush by television executives to deliver shows in new ways-and left them puzzling over how to make a business of it.

A year later, the television landscape is still shifting. Audiences are watching more shows on iPods, cellphones and computers. Networks are figuring out how to accommodate those fans while preserving the schedules that still generate almost all of their revenue. Advertisers are balancing the need to reach mass audiences on broadcast and cable while securing beachheads among new media technologies.

“It’s the first time I can remember that the industry has tried to get ahead of a change rather than follow it,” said television historian Tim Brooks, co-author of “The Complete Directory to Prime Time Network and Cable TV Shows.” “The industry has fallen all over itself to find a way to make a business model, monetize and adjust to a new technology. The danger in that is what overtakes us may not be what we’re looking at.”

The iPod-ABC deal didn’t mark the first time TV shows were freed from the confines of the living room set’s fixed schedule. Forerunners included the TiVo digital video recorder and a variety of handheld devices. But none of those forays combined a dominant brand of portable gadget with top-tier programming from a major network.

Since Mr. Jobs and Mr. Iger unveiled their enterprise, 45 million television TV shows have been sold on the iTunes download store at $1.99 a pop, success that has helped the deal become a waypoint in the history of TV.

It’s too early to gauge the full economic potential of digital television delivery. Those ventures generated about $1.6 billion in 2005, according to Jupiter Research. Ad sales related to digital tie-ins amounted to about 1 percent of the $8.9 billion generated in the 2006 upfront advertising market, where about 70 percent of prime-time spots are sold, ad buyers and network executives estimate.

Even if it represented a baby step, the timing of the iPod-ABC deal put it at the forefront of 12 months of breakthroughs:

AOL and Warner Bros. formed In2TV, marking the first time ad-supported TV fare was available on an Internet site in large quantity.

ABC broke ground by offering full-length, ad-supported episodes of current shows on its Web site.

NBC Universal Television Group CEO Jeff Zucker made the 2006 upfront advertising market the first at which a network connected Internet, mobile and other digital offerings with each of its shows.

Video-sharing site YouTube and social networking site MySpace emerged as the two biggest purveyors of Internet video, together delivering more than 50 million clips in a month.

Google, the most-used search engine company, agreed to populate third-party Web sites across the Internet with MTV Networks videos. NBCU followed suit with its NBBC service.

Mr. Iger and Mr. Jobs now contend with a stampede of competitors seeking to tap the new TV market. And a year later, no one is sure how big that market will be. It may be four years or more before digital media contribute a material portion of revenue at media companies, said Mr. Brooks, executive VP of research at the Lifetime cable network.

Either way, as the stories in this special section illustrate, it’s the incautious TV executive who doesn’t wake up each morning wondering about it.