Tuesday, August 01, 2006

Stream a little stream for me

I wanted to mention the "Arrested Development" syndication deal that came down the pike a few days ago.

Fox did a multi-platform deal with HDNet getting HD rights (smart move there Mark), G4 getting cable rights and MSN getting streaming rights.

First off, it's significant that this, one of the first of its kind, happened with "Arrested" - a property with big niche appeal and longtail upside.

Important for content producers, the streaming deal included an upfront licensing fee and a 50% ad rev share for FOX. Insiders speculate that the deal wouldn't have gotten done without the upfront fee, which makes sense considering that traditional synd deals are all upfront.

It’s been hard as a general business practice to get some of these retailers to step up for guarantees,” says Peter Levinsohn, president of Fox Digital Media. His group represents 20th Century That wasn’t the case this time, he said; several retailers were willing to offer a guarantee/rev-share combo. Fox already had a relationship with MSN; in addition to Fox Sports as the MSN sports anchor, MSN Video streamed some episodes of FX‘s “Black and White.” “MSN really stepped up,” he adds.

But it’s not necessarily a template either. The licensing fee provides the guarantee but Fox is still taking a risk with the rev-share, which will depend on how well MSN delivers on the advertising side. It’s also not the start of a wave of online syndie deals for Fox. Says Levinsohn, “Part of it is going to be is how well does this work?

The deal with cable upstart G4 has significance for web producers too - G4 brands itself as "the most podcasted cable network" and has big web integration.

Also, AOL announced that they will begin a beta of aol video this week at aolvideo.com. This is ad supporting streaming of VOD from content partners like MTV and Warner Bros (remember that big deal AOL struck w/ Warner Bros to stream all their old shows?).

It's obvious to me that the big players on the web are making the deals that maximize their current audience - MSN and AOL are portals, so they go with ad supported streaming in one place, while Apple and Google do download deals.

Yahoo! is still recovering from their failed attempt at content creation, but I'm sure they'll fall into line behind AOL and MSN.

How this market evolves will ultimately be dictated by how the big content producers structure their deals. The MSN development shows that there are Ad Rev deals to be made with MSN right now (they're already doing a lot of those deals).

People who read this blog know that I'm big on syndication as a model for monetizing content, so I'm very interested in what portal sites do in this space.


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