Free TV with Ads Tops Paid Downloads
By Tom Steinert-Threlkeld -- Multichannel News, 1/10/2006 12:49:00 PM
Think twice before you open your own $1.99 online-video store.
By more than a 3-1 margin, consumers would rather watch commercials than pay for TV shows and other programs they can download, according to the results of a survey to be released Wednesday by research firms Points North Group and Horowitz Associates Inc.
Telephone interviews with 800 consumers found that 62% of respondents would prefer to get a favorite TV show they might have missed with commercials, rather than paying $1.99 for the download. Only 17% said they would rather pay the $1.99.
“It always surprises me when people say they are willing to see more advertising,” said Craig Leddy, a contributing analyst at Points North. But he added that consumers will be reluctant to pay for content they’re used to getting free-of-charge.
“$1.99 charges will start adding up on their credit cards, and people will start saying, ‘Hey, I can get that show for free,’” he said, at which point the willingness to pay for downloads will fall off.
The survey was conducted in November after the introduction of the video-playing generation of “iPod” devices from Apple Computer Inc. That introduction included an agreement with The Walt Disney Co. to sell some hit shows from its ABC television network as downloads for $1.99, such as Desperate Housewives and Lost.
Since then, NBC, Fox and CBS have all reached similar download deals with cable and direct-broadcast satellite operators.
The New York Times Tuesday reported that Apple is set to announce a deal with NBC to sell Saturday Night Live skits for $1.99 apiece.
At its Macworld Show Tuesday in San Francisco, Apple said it had sold more than 8 million programs since the launch of video sales on its “iTunes” store (www.apple.com/itunes) Oct. 12.
Last Friday, Google Inc. (www.google.com) announced its own video store, with downloads from CBS, the National Basketball Association and other sources.
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