Disney/ABC Networks Chairman Anne Sweeney has a tough message for broadcasters as TV moves onto the Internet and other new-media platforms: Change not just the way that you regard your viewers but also what you expect from networks.
Speaking at a luncheon at the National Association of Broadcasters convention, Sweeney told TV executives that "We can't cling to old models or old ways of thinking." That includes accepting that networks will push programming to other platforms quickly, and realizing that broadcast affiliates won't always be getting a piece of the action.
Pointing to Disney's deal to start selling top prime time product via itunes, Sweeney acknowledged that "the move did not endear us to many of you in this room." Station affiliates worry that the network is cutting them out of the equation, both by not giving them a slice of the itunes sale and by threatening to lure fans away from television and watch shows online.
While she didn't specifically address revenue splits, Sweeney's message was clear: Broadcast affiliates shouldn't expect a direct cut of the pie. As ABC sells episodes of Lost pay-per-view on itunes or sells commercials for Desperate Housewives streamed on ABC.com, stations won't participate in the revenues.
That's tough to swallow in an industry where affiliates still bemoan the end of network compensation, the money networks paid station distributors for years.
"Instead of staking out territory based on old business models, we need to stop saying `this is how we've always done it,'" Sweeney said. Instead, broadcasters should be asking how they would address television and video if both stations and networks were starting from scratch.
Sweeney insisted that new video technology will be additive both to the ABC network and affiliates. She noted that just as the many Blackberry addicts in the room haven't abandoned their PCs, online video fans won't abandon television. Many TV fans will us the Web or video ipods to catch up on episodes they missed on the air.
Sweeney noted that, last year, the average viewer saw just six episodes of Lost or Desperate Housewives when they aired. What stations and networks really have to worry about is people simply stealing their shows online. She called piracy "our No. 1 competitor" and called the number of people pirating TV online "small but significant."
She estimated that 25,000 people download a new episode of Lost within the 10 hours following its debut on ABC. Sweeney's take is that the viewers show that they want, and if they're consuming video in new forms--online, on cellphones and whatever else develops--then Disney will follow, or hopefully lead. "Every decision we make will be based on consumers," Sweeney said.