In addition to interactivity and a crisper picture, digital distribution also benefits advertisers--making it easier to change the geographic coverage, creative content, and frequency of their ad campaigns. Channel One's 12-minute morning newscast, including two minutes of advertising, reaches about 6 million teenagers in 10,000 high schools across the country.

Last year, Channel One also struck a deal with NBC News for branded news content produced specially for Channel One, and tailored to the teenaged classroom audience. Channel One next plans to introduce student feedback and journalism platforms, giving students a chance to participate in news production.

If they haven't already, place-based and out-of-home video networks are hurrying to upgrade to digital distribution, in part because of the flexibility and control it offers advertisers.

Two weeks ago Channel M, a major in-store video network, announced that it received a new round of funding to develop a digital distribution platform for its place-based video network.