The Cost of Offering Show Downloads

American Public Media's Marketplace featured an interview last night with Disney CEO Bob Iger. He talked about his deal with Apple to bring popular ABC shows to iTunes. At $1.99 a pop, Iger freely admitted that their revenue from downloads is far and away overshadowed by what ABC earns by selling advertising during the broadcast. But he said he looks at downloads as a marketing tool rather than a money maker. Most people, Iger reasons, won't be able to catch every episode on TV. So, by making them available to stream at abc.com or download via iTunes, he's hoping that fans will be able to keep up with the shows and then keep bringing them back to the television set.

I never thought of it that way, and as I got out of my car to head inside the grocery store, I wondered how long it would be until radio adopted a similar model. There are plenty of radio shows that offer downloads of their content, and sometimes entire shows. But, I wasn't aware of anyone doing pay-per-download. Usually if there are any fees involved, it's on a subscription basis.

For example, I see that Dennis Miller's new show has a deal to distribute its audio to cell phones for $3.99/month. Subscribers will be able to listen live as well as listen to an "encore tape" 24/7. I really question the wisdom of distributing shows outside of radio stations. I mean why make a point to tune into your local station when you can download it later? The Dennis Miller Show's site even offers free downloads and streams of every day's show.

But, in light of Bob Iger's comments, maybe this sort of thing is a good marketing tool. Will the day ever come when the online revenue outperforms the broadcast revenue? If so, what then?