Edward Jay Epstein for Slate: Once upon a time—two generations ago—the movie business was about making movies. Nowadays, it is about creating intellectual property that can be licensed in a raft of different markets. The Hollywood studios still make movies, of course, but by 2005, only 14.2 percent of their revenues came from movie ticket sales, while 85.8 percent came from licensing or selling their products for use in the home.
Until 2005, the studio’s principal access to the home market came through pay TV, free television, video rentals, and DVD sales. But now, with products such as Apple’s video iPod and TiVo-type digital recorders becoming widely available, Hollywood is inching toward an even more lucrative way of exploiting the home market.
Disney’s ABC network has already made a deal with Apple that will allow iPod users to download and watch shows, such as Desperate Housewives, for $1.99 an episode. The company has also been talking to Comcast about a similar pay-per-view arrangement for Comcast’s 23 million cable subscribers. CBS, which and NBC have announced plans to release their programs for 99 cents a viewing whenever a customer wants to see them, through linkups with cable and satellite providers. A cost of 99 cents a pop is hardly trivial when multiplied by an audience of 23 million Comcast subscribers.
