New Media Bulletin: May 2007

 

CBS

 

In April, CBS announced the creation of the CBS Interactive Audience Network which will include deals with a host of online distributors including AOL, Microsoft, CNET Networks, Comcast, Joost, Bebo, Brightcove, Netvibes, Sling Media and Veoh.

  • All content will be advertiser supported and free to the consumer.

  • A rotating list within a specified viewing timeframe of programming from entertainment, news and sports will be offered including CSI: Crime Scene Investigation, Late Show with David Letterman, Survivor, CBS Evening News with Katie Couric, among others, including classic programming from the CBS library.

 

Disney

 

Download and Streaming Figures from Disney's Quarterly Investor Call:

  • Disney has sold 23.7 million shows and 2 million movies to date on iTunes, according President/CEO Bob Iger.

    • Since September, 92 million ad supported episodes have been requested on ABC.com.

    • 91 million episodes have been initiated on DisneyChannel.com in the last year.

Content Distribution

  • In May, Disney announced a deal with Cox Communications to provide episodes of prime time shows Desperate Housewives, Grey's Anatomy, Lost and Ugly Betty for its video on demand platform the day after the shows premiere on air. Cox will disable the fast-forward function to make it impossible for users to skip ads while watching these shows.

  • ABC will make full episodes of Grey's Anatomy, Lost, Desperate Housewives and Ugly Betty available on Sprint video-equipped mobile. The deal also includes Disney Channel's Hannah Montana, The Suite Life of Zach & Cody, Cory in the House and Kim Possible. The shows will be available on demand or via three linear mobile channels streaming continuously throughout the day.

 

News Corp and NBCU Video Site

 

The yet to be named site will launch this summer with full-length programming, movies and clips, representing premium content from at least a dozen networks and two major film studios that will be available free, on an ad-supported basis.

  • AOL, MSN, MySpace, CNET, Comcast and Yahoo! will be the new site's initial distribution partners.

  • Charter advertisers include Cadbury Schweppes, Cisco, Esurance, Intel and General Motors.

  • At launch, full episodes and clips from current shows, including Heroes, 24, House, My Name Is Earl, Saturday Night Live, Friday Night Lights, The Riches, 30 Rock, The Simpsons, The Tonight Show, and Prison Break, plus programs from the studios' television libraries.

  • The programming lineup will include films like Borat, Little Miss Sunshine, Devil Wears Prada, The Bourne Identity and Bourne Supremacy with bonus materials and movie trailers.

 

Time Warner

 

To promote the debut of new comedy series, Flight of the Conchords, HBO is making the pilot episode available online in the month prior to the television premiere. The episode will be portable via codes that allow users to embed the episode on blogs, websites, and social networking profiles.

This is a significant development in allowing widespread distribution of a video and poses questions on how to track viewership online when a program can be posted on blogs and personal profiles.

AOL continues to develop new online programming and in April unveiled several new online shows for the fall of 2007 and early 2008.

  • Gold Rush Goes Hollywood: – AOL and Mark Burnett Productions deliver a follow-up to last year's hit game show. Players compete in daily pop culture trivia games for cash prizes.

  • The Ellen DeGeneres Show Tie-in: Lets people share heartwarming, hilarious and absurd hometown tales online that will be featured on a recurring segment on the show." Created in partnership with Telepictures Productions.

  • Million Dollar Bill: Contestants play daily online games to reveal serial numbers of U.S. dollar bills in active circulation. The program is co-produced by AOL, Madison Road Entertainment, Stone & Co. and Viewer Rewards.

  • iLand: The competition begins with an extensive online phase and really heats up when finalists move to a remote island to set up a community. Created by Endemol.

 

FunnyorDie.Com

 

Sequoia Capital, a leading Silicon Valley venture capital firm, has partnered with Will Ferrell and other Hollywood actors to launch a new Web site devoted to distributing short-form comedy videos. The site has received a lot of attention, both because Ferrell's first video for the site has been viewed 30 million times and because Sequoia, an early backer of Google and YouTube, has a good record for recognizing successful ventures. Funnyordie.com features videos by established comedians as well as by amateurs.

This venture as well as SuperDeluxe.com and CollegeHumor.com are new channels for distributing comedy, which fits well into the short-form format popular on the Web. While comedy sites on the Web might appear to be simply competitive with movies, film actors can also use online distribution of their work to build audiences for films.

 

VUDU

 

In April, VUDU, a company that sells an Internet ready movie set-top box, announced deals with Walt Disney Studios, Lionsgate, New Line Cinema, Paramount Pictures, Twentieth Century Fox, Universal Studios, and Warner Bros. Entertainment.

VUDU is unique and a potentially interesting development because it will offer users instant access to more than 5,000 titles directly on their televisions, without requiring a PC or a cable or satellite TV subscription.

 

YouTube

 

In May, YouTube announced that it will start giving a cut of ad revenue to some of the most popular amateur video brands on its site, such as lonelygirl15 and LisaNova. Revenue will reportedly be split 50-50 between YouTube and select producers.

This development further demonstrates the growing opportunity for independent content production to be monetized on the web.

 

Online Advertising

 

Over the past two months, a slew of acquisition activity has taken place as online advertising, increasingly becomes the lynchpin of many new web-based businesses.

 

Date Acquirer Acquired $
4/13 Google DoubleClick $3.1 billion

4/30 Yahoo Right Media $680 million
5/15 AOL Third Screen $80 million (projected)

5/17 WPP 24/7 Real Media $649 million
5/18 Microsoft aQuantive $6.0 billion

In a deal announced last month, Google will purchase DoubleClick the online marketing firm for $3.1 billion from Hellman and Friedman, a private equity firm. The purchase price is three times what Hellman and Friedman paid for DoubleClick just two years ago, an indication of its strategic importance to Google. DoubleClick's Web ad business specializes in banner and video ads and thus opens new markets for Google, which now relies for its profits on its 70% share of text ads linked to online search results. DoubleClick also markets software that tracks consumers' Internet use, thus making advertising more targeted and effective. This technology gives online ads an edge over traditional marketing via mass media and thus could accelerate the movement of ad dollars to the Web. It is this possibility that continues to drive the efforts of media conglomerates to distribute their content on the Web.

 

Implications

 

  • The media conglomerates continue to expand their new media presence through acquisition of online companies. This union of old and new media links content production and distribution in a way that expands audiences for movies and televisions programs.

  • Media companies are continuing a strategy of widespread distribution of content across multiple platforms. Companies are not relying on their own website as the sole source of online content. Even the News Corp – NBCU video site will be distributed across different sites.

    • YouTube is mostly absent in distribution deals and companies are showing signs of favoring Joost for distribution and investment.

  • Web video aggregators such as Google and Yahoo are acquiring technology to boost the effectiveness of online ads relative to ads on traditional media.