State broadcaster TVNZ is abandoning its attempt to sell premium video contact on the web, through its online portal 'TVNZ OnDemand'.
Company spokesman Jason Paris acknowledged the ad-supported free video streams of programmes had outnumbered paid downloads (which also include copy protection) by "many thousands to one".
TVNZ OnDemand was launched early last year in a blaze of publicity. Internet surfers could view "Premium content" video on the site, which included recent episodes of shows like Shortland Street and Eating Media Lunch.
The website used a currency called "PlayPoints", which could be purchased in blocks from a minimum of $10. A regular half-hour show cost $2 to download, but contained digital rights management which meant the video clips "expired" after 7 days.
The broadcaster will now look to expand its advertising-support video content, including offering the service on the Xbox 360 and Playstation 3 video game consoles, as well as on mobile phones.
Currently the OnDemand portal streams about 200,000 TV shows a month. Around 70% of the content is new material, with the remaining 30% coming from State TV's archives.
TVNZ is now renegotiating deals with local and overseas content providers (including Disney/Touchstone), to move from paid downloads to ad-supported. Anti-piracy measures will be dropped at the same time.
Jason Paris, TVNZ's head of emerging business, said the company's business model needed to change for the service to make money.
Advertisers apparently pay 15c each time their commercial is featured around a programme, but TVNZ says it is left with just 2c after delivery costs and agency fees are taken off.
* NZ Herald: TVNZ surrenders to video pirates
^ Alcazar - We Keep On Rockin'
^ Duran Duran - Nite Runner ]
Posted at 9:24 pm