How iPod Video Will Change What You Watch on TV

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Maybe you're like me -- you've heard that iPods can play video and you thought, "So what? Who wants to watch a 2-1/2" screen? Not me. Shoot -- just buy a hand-held TV -- what's so new about that?"

But hear me out.

The next time you're about to kick back and watch your favorite TV show, try this simple experiment.

You'll need:

• A ruler
• A couch
• A TV set

OK? Let's begin:

1. Get comfortable on the couch.
2. Turn on the TV (or not -- just get where you can see the screen).
3. Hold up the ruler between you and the TV screen, placing the ruler as close to normal, comfortable, reading distance from your eyes as you can.
4. Reading the ruler, measure the size of the screen.
5. Write down the measurement.

If you're like most people, the screen will appear to measure approximately 2-1/2" by 2-1/2"...

...which, not by coincidence, is the size of the video image on an iPod. Cool!

But that's the least of it. There's more...

Apple has secured a source of downloadable programming: music videos and network TV shows from Disney and ABC. And it has a distribution channel -- the iTunes store. And the price is right -- $1.99 per download, less than the cost of a rental at Blockbuster. And this stuff is available now. If you missed last night's episode of Lost, it's there for download. The next morning.

Grab it and go. Watch it on the plane, in the car, in line at the bank, in the carpool line at school, waiting to pick up the kids.

But there's more to it than that...

In a time when box-office revenues for first-run movies are minscule compared to the DVD sales revenue, might it be too much to think that download revenues for next-day delivery of TV shows might similarly swamp traditional advertising revenues from network and/or cable TV? This won't happen overnight, but think about it: when you go to see a movie in the theater, you are essentially watching a commercial for the DVD release. Why couldn't it work the same way for TV and downloadable programming?

Look at it like this...

A show is considered a flop if it "only" has 3-5-7 million viewers on network TV. What if only a fraction of that number of people download episodes at $1.99 a pop for each episode? You do the math -- you're talking serious money, especially if the show doesn't have a real high cost of production. Add on the inevitable lead-in commercial (ever watch episodes of The Daily Show online?) and you've got another source of revenue as well. Eventually the owner of the show could leverage this kind of audience into something much bigger, much faster than before.

Not only that -- no FCC, no Standards and Practices, no network weasels.

Hmmm.

Will it mean just more of the same -- More half-hour sitcoms? More one-hour series dramas? In the short run, maybe. I don't know. But that's the beauty of it -- in this system, content is freer to respond to the market than before. It will evolve in response to what people buy, not in response to ambiguous Nielsen ratings, not what a network programming executive decides, not what an advertiser demands.

If you're a young filmmaker, this will be an exciting time for you. It won't be the daunting long shot for a young filmmaker to get his or her work in front of a large audience. Up to now, young (and not-so-young) filmmakers can only hope that their films will be seen at scattered film festivals around the country. In this new framework, a filmmaker who is also good at Internet direct marketing can establish an audience almost overnight. Think JibJab.

The next five years will be very exciting.

P.S. Right now, Apple has a headstart. But if I'm Sony with my PSP, I'm looking for content and distribution partners to leverage my existing PSP brand.

P.P.S. And who says you have to stop at downloads onto an iPod? What about using iTunes to download to your plasma TV?

P.P.S. And remember...we haven't even touched on what this might mean to movies. I have to think Apple is busy on that one too.

(HT to Mark Cuban)