SanDisk's rollout of TakeTV, its new no-frills video download hardware, is interesting; so is its launch of FanFare, an online video service that supports the gadget. But most intriguing is the business model that SanDisk is proposing: While the device and software will let consumers pay for video downloads, SanDisk seems to be most interested in serving up free, ad-supported videos instead.
Right now online video distribution gambits generally falls into one of two camps: Paid, commercial-free downloads (Apple's iTunes, Amazon's Unbox) and ad-supported streams hosted by broadcast networks' own sites or third parties (ABC, YouTube, Hulu, etc).
But both ideas have significant drawbacks: Streaming video tethers viewers to a PC, when what they really want is the ability to watch it on their TV or take it with them; paid downloads require, um, payment. Splitting the difference might work. Last month, in the midst of its public spat with Apple, NBC announced plans to provide free ad-supported downloads of some of its shows, but we haven't seen any sign of "NBC Direct" since then. Now CBS, which is stocking FanFare with some of its content at launch, is talking about making some of its shows available for free in the near future. From Businessweek:
TV show episodes and movies will sell at prices similar to what's found on iTunes: $1.99 per episode for TV shows, and $4.99 for movies, but the service won't be bound by any strict pricing models. That opens the door to free ad-supported downloads, which [CBS exec David] Poltrack says is hugely attractive to content companies like CBS. "The consumer prefers the ad-supported model," he says. "They would rather accept ads than pay for content. There is a minority that would rather pay, but the majority wants the content for free."
This shouldn't be a complete surprise: CBS' Les Moonves has been particularly outspoken about this interest in getting his video distributed as widely as possible, as long as he can sell ads against it -- he's also said repeatedly that paid downloads via iTunes don't generate much cash for CBS. There are big technical challenges to making this work -- DRM, the ability to target and/or change ads, making sure it works on multiple platforms, including Apple -- but conceptually, it makes a lot of sense.
