To Blunt the Web's Impact, TV Tries Building Online Fences

TO BLUNT THE WEB'S IMPACT, TV TRIES BUILDING ONLINE FENCES
[SOURCE: Wall Street Journal, AUTHOR: Amy Schatz Amy.Schatz@wsj.com and Brooks Barnes brooks.barnes@wsj.com]
The TV business depends upon a network of invisible fences and geographic limitations. Now the Web is obliterating them. As broadcasters start to fear the consequences, some are trying new technical and legal tricks to fight back. In some cases, they are even re-creating online the same kinds of geographic boundaries that supported their business before the digital age. The TV industry has long been alarmed about the problem of digital piracy, on the rise now that more viewers watch shows via the Web, iPods and cellphones. The concerns about the industry's geographic structure are a newer and more complex issue. TV studios, for example, make most of their profits through syndication, or selling reruns to local stations in the U.S. and abroad. The business model is based on simple geographic boundaries, and although there is some overlap, stations generally limit their reach to the local market. That gives syndicators 210 different markets in the U.S. alone. International stations add hundreds more. If viewers don't need a local station to watch "Friends" reruns, the show might not fetch as much in syndication. "Nobody is going to pay a very high price for a show that is all over cyberspace," says Don Lundy, general manager of McGraw-Hill Cos.' WRTV station in Indianapolis, an ABC affiliate.
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