NBC isn’t hopping on the iPad bandwagon, according to recent reports. The media giant known for popular shows like “The Office” and “30 Rock” reportedly told Apple it won’t be making any of its online shows iPad-compatible anytime soon. And it’s not alone. Sources cited by The New York Post’s Claire Atkinson say that Time Warner and several other “large media companies” are forgoing what they claim is an expensive reformatting of their video libraries.
But is conversion expense the real reason why some media companies are eschewing the Apple iPad craze? Or is the fact that the ad dollars just aren’t there yet to make it worth their while?
That some media companies aren’t “iPad-ready” isn’t new information by any means, but the fact that it’s being rehashed, re-reported and re-analyzed is notable, especially following Google’s newfound partnership with Adobe, whose Flash plugin stills powers much of the video on the Web today.
With support for Flash in both the upcoming Google TV platform, as well as in Google’s Android mobile operating system (an OS that’s now outselling Apple’s iPhone), Google is making it clear that for the time being, the Web still needs Flash. And media companies like NBC and Time Warner are along for the ride. Why convert videos for the iPad when Android may dominate? Why waste time on “iDevice” support when ad dollars associated with streaming media barely impact the bottom line?
These are the very questions major media companies are considering as we speak.
Streaming Ads Don’t Pay
Some TV and video is available for free on the iPad today, but it’s still more limited that what you would find on the Web in general. ABC has an iPad app, but that’s not surprising considering that the Disney-owned property has Jobs as its largest shareholder. CBS has an iPad-friendly site, but only a few shows are available, and media-filled sites like CNN, Fox News, ESPN.com and others offer varying degrees of iPad-readiness.
But NBC won’t be following these early adopters, it appears.
There’s a very telling quote about this issue from NBC Universal’s president and CEO, Jeff Zucker, that he delivered in January. Speaking about tech advances and the iPad in particular, he said, “We believe in ubiquitous distribution of our content and the fact is consumers want to engage with our content wherever they are… As long as we get paid for that content, we don’t really care where it’s displayed or where it’s used.”
“Get paid,” he said. Streaming video sites, even the NBC Universal creation Hulu.com, have been struggling to make that a reality. Although Hulu finally reached profitability this year, the numbers aren’t anywhere near what traditional TV advertising brings in. Hulu’s revenue topped $100 million in 2009, according to Hulu chief Jason Kilar. To put that in perspective, a 30-second national broadcast TV commercial maybe makes around $300,00-$500,000 these days.
Too Expensive to Convert?
But is there any truth to the claims that conversion is too expensive? Open-Web zealots will tell you that’s a bunch of “FUD” – conversion costs are minimal and there are plenty of solutions out there for ditching Flash and moving to HTML5, the upcoming Web standard that supports plugin-free video viewing.
In reality, while HTML5-enabled video streams are possible today, large media publishers are still waiting for video platform providers to catch up to the capabilities Adobe’s Flash currently offers, including rich analytics, advertising and engagement tracking, and more.
That’s just around the corner, though.
For example, video platform provider Brightcove will be on par with Flash by year-end, according to its published roadmap. However, the expense of conversion is not necessarily as trivial as Apple CEO Steve Jobs has made it seem. The truth, said Brightcove CEO Jeremy Allaire, is that “it depends.” As he told us earlier, publishers that use homegrown video solutions will have more expenses associated with the creation of HTML5 websites. But for customers using platform solutions (like his, of course), the transition is much easier. But Flash and HTML5 will co-exist for years, he said. It’s not a matter of ditching one for the other. That means companies offering an iPad-compatible website must maintain it separately and there is some cost involved with that, minimal as it may be.
But Conversion Cost Isn’t the Problem Here: NBC & Others Just Want to Make Money
Last month, The New York Times reported that NBC execs were showing off a mock-up of an iPad/iPhone-compatible mobile website that offered full episodes of popular shows, ready for streaming. At the last minute, however, the company decided to block iPad viewing of these shows. At present, only clips and the short-form “webisodes” play on the iPhone or iPad.
The fact that NBC had already gone so far as to build a mock-up of an iPad-friendly site makes the whole “it’s too expensive” argument questionable, at least in this case.
So let’s get real about this. NBC isn’t a great network these days. In fact, it hasn’t been “must-see TV” since “Friends” or maybe even the “Seinfeld” era. Olympics coverage notwithstanding, the network trailed others during the past season, losing out to Fox and CBS, both of whom were riding high on the return of the sitcom and reality programming.
Does NBC want to give away its best content for free right now? No. If anyone is bothering to tune into NBC at all, they had better be paying for it, thinks the network, either via their eyeballs glued to the TV screen, via a paid-for iTunes download or perhaps soon, via a subscription to the long-rumored, but still unrealized Hulu iPad application.
Curse, NBC, Time Warner and other iPad holdouts if you want for limiting the fun you can have with your new slate computer. But for them, the iPad isn’t pushing these companies toward the quick adoption of HTML5-powered video – it’s pushing them to figure out a business model for making video pay.
