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iTunes Gamble Pays Off for Networks

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Television networks took a leap into the unknown when they started selling their shows on Apple's iTunes online store, but even in these early days, it's starting to look like that faith in digital downloads was well placed.

Apple CEO Steve Jobs welcomed Walt Disney Co. and Pixar Animation Studios content to the service in October. Now there are 40 different series, each episode of which costs a standardized $1.99 to purchase, and more are on the way.

Nobody will disclose numbers for these television downloads. It's easy, however, to keep an eye on the iTunes download chart, which usually shows NBC's "The Office" as the top full-length program, followed by ABC's "Lost" and Comedy Central's "South Park."

Ben Silverman, who executive produces "The Office" with Greg Daniels, Ricky Gervais, Stephen Merchant and Howard Klein, praised NBC for its willingness to "dive into the iTunes relationship quickly" and credits the download capability with boosting the show's broadcast ratings.

Silverman noted that "The Office," which went into reruns just before the video iPod's first Christmas, was boosted by people who discovered the show when they were browsing to find something to put on their new device.

"That confluence brought us a sampling of a new audience, which also is not an audience that watches TV by sitting down at the time the broadcaster wants to show it," he said.

Then NBC moved the show to Thursday nights. "That's like the network telling people it's important to them and part of the whole history of comedy," Silverman said.

He is confident that the downloads are not eroding audience or invading any of the existing windows, due primarily to their portable and on-demand nature.

"The DVD potentially will get affected, but the revenue as it relates to the studio is higher because of the cost being so much lower and the price points being the same while you're getting a larger percentage of the revenue," Silverman said.

NBC on Jan. 10 added more programs to iTunes, making a total of 13 NBC Universal shows available, including NBC's "Law & Order," USA Network's "Monk" and Sci Fi Channel's "Battlestar Galactica."

MTV Networks disclosed its iTunes slate Jan. 26, with 14 shows from MTV, MTV2, Comedy Central, Nickelodeon and the N, including "Punk'd," "South Park," "Dora the Explorer," "SpongeBob SquarePants," and "Laguna Beach."

Jason Hirschhorn, chief digital officer at MTV Networks, said the preliminary numbers looked good but that the final numbers weren't in yet.

"The nets are doing as well as they've ever done, and the Web sites are upping traffic," he said. "We believe this is additive -- the best way to watch longform is on your couch."

Hirschhorn also is working on models for sharing these new potential benefits with the cable affiliates.

On Jan. 26, ESPN and ABC Sports added programming from its Winter X Games 10 coverage along with shows like the "SportsCentury" biography series.

ITunes users previously could purchase condensed versions of ABC Sports' Bowl Championship Series college football games, the first sports content on iTunes.

Other programs from the Disney companies include ABC's "Lost," "Desperate Housewives" and "Commander in Chief"; ABC Family's "Wildfire"; and Disney Channel's "That's So Raven" and "Kim Possible."

"Overall, we've seen our ratings increase for the shows we have on iTunes, and it continues to pick up momentum," said Albert Cheng, executive vp digital media at Disney-ABC Television Group.

He said "Lost" is doing "extraordinarily well" on iTunes, a fact he attributes primarily to the overlap in demographics between the broadcast viewers and iPod users.

"We wanted to put our best shows on the platform, but you never really know what you're going to get," Cheng said. "Video has surpassed everyone's expectations, but I do believe iPod is basically a music device and video is an additional benefit to having one."

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Chris Marlowe writes for The Hollywood Reporter.

For more news from The Hollywood Reporter, click here.

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