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Consumers refusing to pay for downloads of shows, study says
We want our FREE TV
Thursday, May 17, 2007

Courtesy of Apple
The Disney/Pixar movie "Cars" is seen on a monitor via an AppleTV box. Paying to watch TV shows on the Web has not found a following among consumers.
Click photo for larger image.

Pay-per-view TV shows sold on iTunes and other Internet downloading services are failing to gain traction with consumers.

A study released by Boston-based Forrester Research this week claims that couch potatoes soon will be viewing their favorite TV show downloads for free, accompanied by a few short commercials.

The confusion and hassle associated with Web-based video watching is partly why Forrester and other industry experts said the practice of paying between $2 and $4 to catch an episode of NBC's popular "My Name is Earl" on the Web is failing to catch on.

"When I watch HBO's 'The Sopranos' I don't want to think about how I spent another 3 bucks -- I want to feel like it's free," said Eric Garland, chief executive officer of Big Champagne Online Media, an Internet media measurement firm based in Los Angeles.

While there's an extra $10 tacked onto Mr. Garland's monthly cable bill allowing him to watch "The Sopranos" and other HBO programming, when he's flipping channels, he never thinks about it.

If he had to shell out the money upfront each time, Mr. Garland said he might decide it's not worth it.

"It doesn't have to be free; it just has to feel like free," he added.

It seems most consumers agree with him.

Only a sliver of the video-viewing masses -- about 9 percent -- have the know-how, time, money and patience to surf the Internet for programming, according to the Forrester report.

Robinson-based startup WhereverTV is gunning for the other 91 percent by making it easy and cheap for consumers to watch anything they want on the Web, anywhere, anytime.

"Consumers don't want to know where [TV] is coming from, they want to hit a play button and see the video, said Mark Cavicchia, who founded WhereverTV two years ago.

WhereverTV's software, which is still in development, would allow consumers to connect a Wi-Fi ready mobile device to a TV and use it like a remote control to access a personalized menu of TV channels and programs, movie downloads, video clips, etc.

Even more important to WhereverTV's success is that consumers can take their tailor-made, a la carte TV wherever they go -- home, work, hotels -- a feature that Mr. Cavicchia said sets it apart from its rivals.

Hassle-free at-home and on-the-go TV will become the norm in the next decade because consumers will demand it, said Big Champagne's Mr. Garland, who likens the trend to the evolution of the World Wide Web from being the tool of tech geeks in the 1990s to the product "your mother-in-law couldn't live without" today.

Consumers already are seeing glimmers of the TV future thanks to Internet video ventures such as Joost.

Last week, Luxembourg-based Joost landed $45 million from five investors, including CBS Corp. and Viacom Inc., to deliver select TV programs from CBS, Comedy Central, MTV and Nickelodeon free-of-charge on the Internet. The service currently is in the testing phase.

This summer, NBCU, a joint venture of NBC Universal and the Fox Network's parent News Corp., will use Yahoo, MSN, AOL and other Web outlets to funnel thousands of hours of free programming, including popular shows such as Fox's "24" and NBC's "Heroes." Comcast Corp. has agreed to contribute content from E!, Style, G4, Versus and Golf Channel.

Since the explosion of this new way of watching TV is still at least a decade away from being de rigeur, today's pay-to-watch providers such as Amazon.com, which allows users to download programming to some TiVo digital video recorders, needn't panic, analysts noted.

Apple Computer needn't worry either, with iTunes in possession of more than 80 percent of the digital music market. But it may have to rethink its $299 cigar box-size device known as AppleTV, which the Cupertino, Calif-based computer giant hoped would be for television what the iPod is for music. In addition to purchasing AppleTV, consumers need an Apple computer to manage the programming, which could be a disadvantage as free video downloading gains momentum. Forrester predicts that paid video downloading will peak this year at roughly $279 million in sales.

If the new age of TV is too much for skeptics and Luddites to swallow, the days of TV as we know it aren't likely to vaporize anytime soon, said Phil Leigh, a principal analyst at InsideDigitalMedia.

"It took nearly a decade for the VHS tape to disappear," said Mr. Leigh.

First published on May 16, 2007 at 8:46 pm
Corilyn Shropshire can be reached at cshropshire@post-gazette.com or 412-263-1413.