Digital Impasse - 8/28/2006 - Broadcasting & Cable - CA6366086: "A year after ABC began offering its primetime hits on iTunes, kicking off a scramble to put network shows on emerging platforms, networks and third-party studios are still battling over digital-distribution rights, revenue-sharing and branding for their shows. While the studios are as eager as the networks to dip a toe into digital distribution, they are wary of disrupting their proven revenue streams.

“We need to be careful that we don’t allow the growth of new business models to have a negative impact on the downstream value of the content without offsetting the lost revenue from those downstream values,” says Bruce Rosenblum, president of Warner Bros. Television Group, which produces NBC’s ER, CBS’ Two and a Half Men and TNT’s The Closer. At What Cost?

Downstream, of course, are the DVD and syndication sales that studios rely on to make back the millions they front to the networks to fund the shows. Putting their shows on iTunes for $1.99 a pop may offer quick money, but at what cost to future returns?"

The sticking points range from which party should pay for the rights to music used in a show to whether networks are adequately attentive to the profit participants, such as actors or writers.

Networks, for their part, are restricted by their affiliate agreements when it comes to distributing content digitally.

Touchstone Television President Mark Pedowitz sounds similarly optimistic that the current impasse will be resolved.

“Because of the radical transformation of the business,” he says, “no one’s quite sure where they’re standing on this earth for any given moment. You have to eventually step off the curb to see what the world is like.”

tags: tv video internet distribution-1 control-1 control-2 control-3 problem synthesis-tm1 short-term