How the TV industry will fail due to bit torrent

Submitted by Patrick Grote on Fri, 05/27/2005 - 2:40pm.

The title of this entry may be misleading. See, the TV industry will fail due to bit torrent, but not in the way you think. The TV industry will fail because they're not using bit torrent.

TV enjoyed a banner year for the 2004-2005 season. Ratings dipped just a tenth point instead of the half point losses seen since 2000.

Steve McPherson of ABC Entertainment said:

The idea that you can have a Sunday night like a few weeks ago, where 'Survivor' does well, and we do phenomenal numbers and Fox does well with its animation means that you've got all these people coming to broadcast television. It shows there's just a thirst for appointment television."

Interesting.

This is extremely interesting since the MPAA recently shut down bit torrent sites that offered TV programming.

If you aren't familiar with bit torrent it is a peer to peer application that allows large files to be broken up and sent by multiple people other people. For instance, let's say I wanted to download the latest American Idol. I would use my bit torrent client to transfer the file. The bit torrent client would look for all the people that have the file I am looking for and download little pieces from each. This way I can download faster and easier than relying on one person for the file.

The TV torrent sites were simply taking programs that were broadcast on TV and making them available for download. In some cases all the sites did was link to other people who hosted the information.

There were three issues with what was happening:

The advertising was being stripped out - When I downloaded American Idol it was actually 40 minutes long as the 20 minutes of commercials were removed.
The shows were from pay channels - Sometimes episodic fare such as Carnivale or Huff were distributed. These shows are shown on pay channels.
It didn't respect scheduling - Many times shows would be available for download prior to showing on the west coast.

These sites were fantastically popular as many times an episode would have tens of thousands of people transferring the show among themselves.

And this is where the story gets interesting. See, 2004 was the year that bit torrent TV show distribution came into its own. Hundreds of articles appeared across the country touting the ability to pop onto the internet to grab a show you missed. Tivo on the internet is what it was called.

People who didn't get a chance to tape the show or others who might not have watched the show logged onto the internet and downloaded the episode. Rousing success. And with that rousing success came the great season of 2004-2005 for the TV networks.

Now, the networks have gone and killed the primary reason for their resurgence. They have moved to eliminate the distribution channel that is responsible for their success. The public has spoken and it has said:

I want my TV where I want.
I want my TV when I want.
I want my TV my way.

Of course, this scares the crap out of the TV industry. Their business model is predicated upon advertising. Companies pay the networks to show advertising and the companies design shows to get you to watch. Once you eliminate that revenue stream you've killed network TV.

The TV industry has a chance to do what the music industry failed to do. They can seize control of a new market as it emerges.

Will the TV industry turn its back on this lucrative offering and focus on TV show DVDs, which ironically will be pirated anyway. Or will the TV industry step up and offer episodes itself?

Unless other popular avenues pop up for distributing TV torrents in the next 6 months, I predict the TV industry's 2005-2006 season will be one of the worst in recent memory.