Desperate Houswives for $1.99

One of my favorite radio programs is Marketplace on NPR. The theme song alone can get me in a good mood. I was listening on Tuesday to Kai Ryssdal interview Disney CEO Bob Iger and was drawn into Iger’s rationale behind selling TV series episodes on iTunes. The outtake that caught my attention is:

IGER: A successful TV series will produce between 22 and 25 episodes each season. And the committed or the avid viewer of that series, in a given year, will probably watch somewhere in the neighborhood of a third of all those episodes. … Because of other choices, other choices lifestyle-wise, meaning you're busy, you've got other obligations or other choices in terms of consuming media or spending your time. And if we could figure out ways, which we are starting to do, thanks again to digital technology, to engage these people more often, to get them to consume more, because we're creating either convenience or a different price to value relationship or making use of a new technology, then we actually will grow our business instead of in any way decreasing or diminishing our business.

So a lot of these initiatives, the one you just cited, iTunes and the $1.99 episode, or one you mentioned earlier, streaming on ABC, are actually designed to create incremental consumption, to give people who may not have a chance to watch as many of these programs as they once did, to watch more instead of to shift their viewing from the I'll call it the initial airing that creates the most value on ABC, to a secondary consumption form that may create less value. And so far, while the results are still relatively new to us because this has only been going on for about a year, what we're seeing is in fact incremental consumption and not a cannibalization of the initial form of consumption.

First of all, it may be common industry knowledge, but I’ve never known that the committed viewer only views one-third of the episodes in a given season. That strikes me as a low number, but perhaps not a low average, and apparently American Idol hasn’t skewed the industries overall numbers.

Beyond the wake up call on the relative lack of commitment to any one TV series, Iger is speaking not of the well-documented fragmentation of TV viewership, but to changes in overall media consumption.

A study I reference frequently when I give presentations is "A Day in the Life: An Ethnographic Study of Media Consumption", a study conducted by Ball State University's Center for Media Design. The study shows how Internet, phone, and game console use have increased dramatically over a 10-year period ending in 2005. Television viewership still dominates, but other media is gaining ground fast, and leaving traditional print in the dust. In addition, the study shows that consumers use the Web consecutively or simultaneously with other media, including television, print and radio. It also concludes that combining online marketing with marketing in other mediums "adds substantial incremental reach to other media, making it a great partner."

So online use is not only growing, it is improving the reach of other media types, even those whose reach continues to fall.

Most interesting of all, if Bob Iger is a good indicator Disney understands what this all means to their business and is doing something about it.