ABC.com will still host the videos, but the arrangement gives stations the opportunity to boost traffic on their Web sites by promoting them as access points to the hit shows. The stations can also sell advertising tied to the links--and at least one station has already signed up a sponsor.
The agreement is viewed as a test within a test. ABC.com is in the midst of a trial program running through June in which it's streaming free, ad-supported episodes of "Lost," "Desperate Housewives," "Commander In Chief," and "Alias." Now, those four stations--plus one station owned and operated by ABC--will be able to test whether links to the shows have any material effect on their Web businesses.
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The stations may also be able to show ABC that they can drive significant traffic to the ABC.com streams, giving them negotiating leverage as the network and affiliates haggle over how to split revenues from Internet broadcasts going forward.
The stations involved in the test are Belo Corp.'s WFAA in Dallas, Cox Broadcasting's WFTV in Orlando, Hearst-Argyle Television's WISN in Milwaukee, and Young Broadcasting's WATE in Knoxville, Tenn. The ABC O&O in Los Angeles, KABC, is also participating.
By Friday, all but the Orlando station had established prominent links to the videos on their Web sites. And the Milwaukee station had an advertiser, with local home retailer Colder's appearing on a banner ad along with "Desperate Housewives" star Teri Hatcher and other ABC symbols on top of its home page. The ad linked to a launching area for the videos, where a dedicated Colder's banner appears.
"There's nothing more exciting than taking a leadership role in the launch of new media ventures," said Frank Biancuzzo, president and general manager of Milwaukee's WISN. "This is just one more step in strengthening our local relationship and image with online consumers."
But until the agreement was worked out, affiliate executives like Biancuzzo were none too pleased with ABC's initiative, believing that viewers might opt to view the programs at ABC.com and hurt stations' ratings and revenues in the process. Affiliates, which have been upset since last fall when ABC made hit shows available on iTunes, became further incensed recently by remarks from top ABC executive Anne Sweeney suggesting that stations are taking a head-in-the-sand approach to digital distribution opportunities.
Last week's agreement, which was announced only days after Hearst-Argyle CEO David Barrett blasted ABC for pursuing a strategy that threatened to nullify aspects of the traditional network-affiliate partnership, is a further sign of how networks and affiliates are making up the rules with regard to off-net distribution as they go along. "We are open to exploring ways to work with our local broadcast affiliates as we experiment in the digital media arena," said John Rouse, ABC's senior vice president of affiliate relations. "Having these affiliates participate in--and share research from--this experiment will help us to best determine a successful model for all of our businesses, as they continue to evolve."
On Friday, Milwaukee station WISN indicated that ABC and affiliates will attempt to negotiate some sort of revenue-sharing arrangement before the fall season. Fox recently made a deal in which affiliates will get a cut of advertising and/or subscription revenues from programming that appears on platforms such as the Internet, VOD, mobile phones, and iPods. NBC and its affiliates have agreed to launch a joint venture to distribute streaming video called The National Broadband Company, although it's unclear how network shows from NBC might play a role.