Showtime has never been one to play it safe. After all, this is the premium cable network that gave us shows like “Californication” and “Dexter,” which explore everything from dysfunctional self-indulgence to the moral conflicts of a serial killer. But according to reports in MediaPost, Showtime will now make several of its shows available for free to a select group of college students through Intercast Network’s Kazam, a new ad-supported online distribution system.

Several cable programmers already make shows available for free online (often to the chagrin of distributors that pay them license fees). But Showtime is different. It’s a premium service with no advertising, meaning that it’s 100% dependent on those fees for its survival. Other free premium online video tends to come from ad-supported networks trying to stop people from DVRing shows and skipping over the commercials (Hulu, for example, streams shows with non-skippable ads throughout).

So what is Showtime up to? For one, the net wants to ingratiate itself to a new generation of TV watchers who may not now have the cash to pay for Showtime but sure will someday. Does it risk ruffling MSO feathers if this “test” evolves into something available across the country? And does Showtime risk in some way canibalizing its own core business? Perhaps, but Showtime understands where the world is going. It knows that more viewers than ever expect full control over where and how they watch their favorite shows. People don’t care about the economics of the business or what networks depend on advertising vs license fees or which ones depend on both. In fact, we’re fast approaching a place in which viewers don’t even care whether the video they find online even comes from the TV universe.

And forget about the user-generated stuff for a minute. Consider the digital studios that major media companies are setting up all over the place. Disney is already seeding the Internet with webisodes of Sci Fi epics like “Trenches” while NBCU has been testing the waters with its Rosario Dawson-helmed “Gemini Division” (which is also available on cable VOD). Gemini is especially interesting, as the production is funded by product placements rather than through commercial spots.

In the case of Showtime, the net isn’t really selling ads per se. Users must download software provided by online video service Kazam, which serves up the ads. Interestingly, the Showtime deal comes just as Rainbow’s IFC and Sundance—both ad-free nets—this month announced the appointments of Alan Klein and Kim Gabelmann to head up branded entertainment and partnerships, respectively. They’ll be working to put product placements into shows. So 30-second spots or not, advertising revenue will be coming in the door. All of this suggests that the future depends on new models and a renewed willingness to work with advertisers in innovative ways.

The Daily


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