In an effort to extend its broadcast economic model to the Internet, the Walt Disney Company
said today that it would offer some of its most popular ABC television
shows free on its Web sites but with commercials that cannot be
Fred Wilson and Jeff Jarvis are excited about the move. Both write extensively on the future of media. Fred is impressed that it’s big media that’s stepping forward.
This is big, big, big.
It means they get The Future of Media.
They are freeing their content and monetizing it on the web. It looks
like they are microchunking it, but it’s not totally clear. And I am
not sure about the syndication part. But it doesn’t really matter.
They get it, they are leading they way.
Jeff comments on what he think this means for the economics of media:
And that leads to the real danger to media competitors: Ad Age reported
last week that the ad industry is “ousting broadcast TV as its central
organizing principle.” That is seismic.
What this really means: TV is grabbing a share of online advertising by redefining TV as both broadcast and broadband.
There are detractors, too. Umair Haque, a prolific thinker on new media strategy feels Disney’s only taking one half of the required action, "unbundling without rebundling", and that it’s going to be destructive.
The point: unbundling media is only half the game: the value creation
half. And it’s exactly and totally the wrong half from a strategic
point of view.
Rebundling is where value capture will
happen – at communities, reconstructors, markets, networks – that
direct people’s attention to individualized ‘casts. This is where
branding will be reborn – and where advertising is already being
disrupted, ripped apart, and reborn (viz, Google, PPC, pay per call,
By focusing on unbundling without rebundling Disney is getting edge strategy exactly wrong. They are handing market power to folks like YouTube and MySpace – literally just forking over market power.
From a consumer’s standpoint, I find Disney’s move to be bold and courageous. My view is more in line with Fred and Jeff. It’s difficult to foresee what exactly happens when you microchunk content and release to the general population. One result may be that (as Umair proclaims) that you get p2p networks flooded with Desperate Housewives episodes sans ads. The other may be that you get MySpace-like communities created around TV shows, with strong social components. The former scenario would hurt Disney, the latter would help. I don’t think we know how it will play out. At the end, Disney will benefit, even if it costs them some short-term revenue, because they will find out what happens, first.
UPDATE: Fred Wilson replays the above-constructed conversation from his prespective, in his post today.