February 8, 2006
ITunes Hooks Up to Cable Television Via Showtime
By Chris Marlowe
LOS ANGELES -- TV viewers who don't subscribe to Showtime Networks will be able to enjoy its premium cable content on demand, thanks to a deal that makes nonbroadcast television available on iTunes for the first time.
"Sleeper Cell," "Weeds" and "Fat Actress" are the initial programs included in the deal, which was announced Tuesday by Apple Computer and the CBS Corp.-owned channel. Viewers will be able to choose any or all episodes from the first episode in each series.
There was no magic formula behind selecting those current and previous-season programs, Showtime Networks chairman Matthew Blank said. "We decided based on rights issues, a mix of programing types and things we thought people would be interested in," he said. "This is the grand experiment, really."
As with every other television show on iTunes, each episode costs $1.99 and can be viewed on a computer or a video iPod.
Blank said the nonexclusive deal represents "the beginnings of a business model" that he expects to build ancillary revenue along with awareness of Showtime and its original programing.
"In our case, we're only in 14 million homes, so we think we can generate revenue in our current user base but also from people who don't subscribe to Showtime," Blank said.
The long-term opportunities remain to be seen, he added, but exposing viewers to programs they enjoy when paid for individually will serve as an introductory trial of Showtime and highlight the value of subscribing to the premium channel.
Blank is not overly concerned that the iTunes sales will cut into DVD sales because he thinks each serves a different purpose to the viewer. "But this is a test, and we're trying to see where the mix of any number of factors comes into play," he said.
ITunes is not the only trial Blank has in mind. He said other distribution methods are being evaluated as the network seeks the best way to reach audiences in the digital world.