Will Apple Pay Media Companies When Ads are Skipped by Apple TV? Fascinating Speculation About A New Revenue Stream
In the not-yet 120 year history of motion pictures, there have been a number of methods for distributing content and making money.
For example, when commercial TV took off starting in 1948, theaters suffered. But the studios eventually figured out how to replace the precipitous drop in box office (in the US, theatrical box office dropped 50% from 1948-1953) with advertising dollars from TV.
This pattern - of 1) a radical shift in distribution paradigm followed by 2) an entirely new revenue stream - is not limited to the motion picture business: When any business paradigm changes, it's often bad news for the old forms of collecting revenue, but new forms often arise and commerce moves on.
Thoughts about motion picture paradigm shifts and new revenue came to mind as I read Jessica Lessin's July 15th, 2013 blogpost reporting that Apple is in talks with cable companies and television networks about a "technology that... [would allow] viewers to skip commercials... [but that would also pay] media companies for the skipped views."
In over 50 years of broadcast TV, this idea - that ad-supported media companies might make money when their ads are skipped - reflects a totally new approach to making money from motion pictures.
This proposal - if true and accepted by ad-supported media companies - would be yet another example of how the motion picture business has adapted as distribution paradigms have evolved (from theaters, to broadcast TV, to VCRs, to DVDs, to DVRs...).
Why would companies that have built their businesses on advertising dollars contemplate such a shift in revenue model? Because the paradigm has already changed: "[I]t is no secret that fewer and fewer people are watching commercials thanks to DVRs; networks may very well be eager to make, rather than lose, money off the practice."