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Down the tube

Viewers shift from TV sets to computers

Joyzelle Davis, Rocky Mountain News

Published April 17, 2006 at midnight

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If you missed last night's episode of ABC's Desperate Housewives, soon you'll be able to catch it on your home or office computer.

ABC announced last week that as of May 1, the network will make four of its hit shows available free on its Web site. The entry of the women of Wisteria Lane into cyberspace comes after CBS had unexpected success with Internet broadcasts of the NCAA men's basketball tournament - with more than 5 million viewers - and Time Warner launched in2TV, which streams vintage TV shows such as Growing Pains and Welcome Back, Kotter.

The shift from the TV set to the PC is a natural progression as broadband connections become the norm. Half of U.S. homes have broadband, according to Forrester Research, and the generation that grew up with the Internet spends more time online than in front of their televisions.

"There's a young audience that's saying: I want to try different ways" to see TV shows, said David Zaslav, president of NBC Universal Cable.

Programmers such as NBC are eager to move online to provide another way to get sitcoms and dramas in front of time-challenged viewers. Advertisers like the Internet play because they can slice audiences into precise demographic groups, then collect statistics in a way not possible with TV.

So where does this leave cable and satellite providers such as EchoStar's Dish Network and Comcast, who charge customers to access television?

At the cable industry's convention in Atlanta last week, much of the talk swirled around a fancy term, disintermediation - which basically means the fear that customers might decide eventually to drop their cable service and just watch TV on the Internet instead.

"It comes down to who owns the rights and who can give the rights," said Bob Greene, senior vice president of advanced services at Starz Entertainment Group, during a panel at the National Show. "Cable doesn't have the rights to push onto new platforms.

Douglas County-based Starz, which offers 13 digital movie channels, does have that position. Starz earlier this year launched a redesigned version of its Internet movie downloading service.

How much viewing will shift from the TV to the Internet is open to debate. Jeffrey Wlodarczak, senior media analyst with Wachovia Capital Markets, estimates that at most 5 percent of viewers - the "hard-core techies" - might drop their cable or satellite-TV service.

"At the end of the day, people watch TV to relax. It's a passive form of entertainment" in the way the Internet isn't, said Richard Greenfield, media analyst at Pali Research.

ABC's Anne Sweeney, president of Disney-ABC Television Group, insists the network isn't attempting an end-run around cable operators such as Comcast, which has 700,000 customers in Colorado. Programmers need to experiment with various forms of distribution to get in front of viewers, whose habits increasingly are changing: While more than 40 percent of baby boomers watch their TV sets when they come home, the same number of people ages 8 to 27 use as many as eight different technologies before bedtime, she said.

Mark Cuban, president and chairman of Denver-based high-definition channel HDNet, said ABC's move to the Internet is a savvy way to reach a whole new audience: office workers.

ABC isn't the only potential online competitor for cable and satellite operators. Search engines Yahoo!, Google and Microsoft's MSN have moved aggressively into the video world, offering video sharing and shorter clips.

If cable executives are alarmed by the talk about watching TV over the Internet, they weren't showing it last week. One theory they floated was that other forms of video distribution might lead to more media consumption without taking business away from anyone, similar to what has happened in Japan and Korea.

"The idea is to make the pie bigger," said Brian Roberts, Comcast's chief executive.

Narrowstep, which provides technology to deliver video streams, said a variety of cable operators have met to discuss how they can get into the market in some way.

"They know that the status quo of how we watch cable TV is being challenged," said Osh Richardson, Narrowstep's vice president of sales. "They have to either enter the market or come up with something better."

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