Analysts Not Sold On AOL, QVC Partnership

by Gavin O'Malley, Jan 19, 2007, 6:01 AM

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Testing a classic cable staple online, AOL will launch its first streaming video channels with clips from QVC. With the new partnership, home shoppers can now watch QVC TV Live on AOL at work--or wherever they can't find a TV--and will soon have access to QVC clips on demand.

AOL and QVC have agreed to an undisclosed split of revenue from sales driven by the Webcasts--an additional source of revenue for AOL, which has rested its future chiefly on ad dollars since scrapping its broadband subscription fees last August.

In that vein, AOL debuted a video site last summer loaded with over 45 on-demand channels streaming millions of clips contributed by consumer generators and CNN, MTV, and Comedy Central, among other sources.

Industry analysts, while crediting AOL for exploring new revenue opportunities, were less than enthusiastic about the QVC offerings.

"Oh, yuck," was all Gartner Research Director Mike McGuire had to say on the matter.

"It doesn't give me any reason to visit AOL," remarked Inside Digital Media analyst Phil Leigh. "AOL has this legacy of mainstream customers who might have time for this, but it's not exactly riveting, original content."

Further skepticism came from Jupiter Research analyst Todd Chanko, who noted a clear divide between consumers' TV shopping experience and their online shopping behavior.

"Shopping networks depend on impulse and serendipity and seduction," said Chanko, referring to TV. "That's very different from online shopping, which is usually very pointed." Chanko added, "I also don't see a demand for this. I'd imagine that most potential watchers are already doing it on TV."

Fred McIntyre, senior vice president of AOL Video, defended the partnership with user expectations. "What we know is that increasingly consumers are looking to the Internet to get content on their own terms," he said. "That is the fundamental phenomenon going on right now."

Added Bob Myers, senior vice president of QVC.com: "QVC is continually looking for new ways to be everywhere consumers want to shop."

The QVC on-demand content, which is expected to debut on AOL next week, will include more than 400 clips of video content from various programming events and shows updated daily.

Liberty Media-owned QVC--distributed to over 160 millions home around the world--rakes in annual revenues of around $7 billion. Neither QVC or AOL would say how much revenue they expected to generate from the new webcasts.

The webcasts will run ad-free, and will appear exactly as they do on television. AOL is not offering click-to-purchase options along with the webcasts, according to McIntyre.

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