Stephen Foley: Micropayment revenues for TV companies may be just that, microscopic
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Thursday 28 July 2011
Outlook What Rupert Murdoch did to his UK newspapers, he is doing now to US television. No, this is not a point about collapsing ethics. It is about paywalls. Fox, News Corp-owned home to The X Factor and The Simpsons, is pulling back from an experiment that made just-aired shows available for free on the internet via the website Hulu.com. ABC, the American network owned by Disney, is contemplating following suit.
Meanwhile, on the other side of the Atlantic, ITV says it will introduce a micropayments system to enable it to charge for shows on its online player from January. The launch is already behind the original schedule, and Adam Crozier, chief executive, says there will be an initial period of experimentation as the company wrestles with the question of what viewers are willing to pay for. As SeeSaw, which tried to sell episodes of South Park and Spooks to the UK public, discovered, the answer to that question seems to be: not a whole lot.
Can either of these experiments spare television from the fate of the music industry, and turn the internet from a threat to a source of new, sustainable revenues? The omens do not look good.
Mr Murdoch is a Cnut, almost single-handedly trying to hold back the tide of free content on the internet, and such is the might of News Corp it is tempting to think that if anyone can, it will. BSkyB in in the UK is about to launch an experiment of its own, with monthly subscriptions to Sky Go, a digital player for its programmes online and on mobile devices.
But The Times and The Sunday Times traded influence for minimal extra revenues when they put up their paywalls, so it will ultimately prove it is down on the deal.
And Fox's latest pull-back from Hulu is a defensive move, designed not to generate new revenues but to protect hard-won existing ones. Cable television operators, who include Fox in their bundles of television channels, pay News Corp for the privilege, and they are angry that the same content turns up elsewhere for free almost instantaneously, To assuage them, only authenticated cable subscribers will now be able to watch Fox shows on Hulu until eight days have elapsed and they become free to all.
All of which is to say that Mr Murdoch has learnt that making money from his TV content is best done by dealing with the intermediaries. These content bundlers, big companies all, are the ones who really can be squeezed. Charging viewers directly would be a costly pain, even it worked. Much more likely, most users would tune out, and dedicated fans would be driven to piracy.
As ITV works to sweat its assets and generate more money from its programmes, micropayments look the least likely route to success.
- 3 Russian girl takes her own life after parents find pornography on her computer
- 4 Ball pool for adults opens in London
- 5 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Kim Kardashian on Bruce Jenner's 'story': 'We support him no matter what, and I think when the time is right, he'll talk'
Russian girl takes her own life after parents find pornography on her computer
Ball pool for adults opens in London
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...