• by Gavin O'Malley  @mp_gavin, September 26, 2005

Late last week, New Tier Communications, which produces and distributes broadband video, reached a long-term revenue sharing partnership with ISP Sports, the multimedia rights holder for University of California Athletics, to market the school's new and archived sports footage to fans as well as content carriers like SBC and Verizon--each of which is in the process of expanding their content offerings.

New Tier is working closely to cover all 27 Golden Bear sports programs. In addition to game footage, content will include highlights from the "Cal Sports Report" television program--such as press conferences, student-athlete features, and coach reports--for a cost of $80 a year for students and alumni.

Todd Merkow, New Tier partner and former Fox Sports Net executive, said that while he is open to advertising deals, paid subscriptions literally make more sense at the moment.

"At this point in our business, it's difficult for big advertisers to get excited about niche markets," Merkow explained. "But as we build our roster of schools into a bigger network, I think opportunities beyond the paid model will open up."

The company is aggressively seeking similar partnerships with many universities, and expects to name several new partnerships within a year's time, Merkow added. The only other sure partner he would name is Northern Arizona.

Michael Zimbalist, president of the Online Publishers Association, said niche content publishers such as New Tier are proliferating. "Thanks to better technology, the number of content publishers is exploding along with the ability to deliver that content with greater precision and at lower cost," Zimbalist said. Whether any of those companies will appeal to advertisers, however, remains to be seen, Zimbalist said: "Who is going to create successful businesses, or who will attract advertisers in this new landscape, is a question that I don't have the answer to."

Before advertisers begin to bite, New Tier's business will likely come from deals with SBC and its rivals who are currently testing IPTV, or Internet Protocol Television, according to Joe Laszlo, Jupiter Research's broadband research director.

"With IPTV and other technologies, SBC, Verizon, and others seem to have taken the popular Internet phrase, 'the long tail'--which, in this context, means making a lot of money collectively from many different smaller audiences," said Laszlo. "And, while they appear to have the technology to make it economical, they still have to go out and get the local and specialized content that people are looking for."

New Tier's Merkow said he is indeed pursuing such deals.

Mike Coe, an SBC spokesman, said that many such content deals were imminent, although he declined to provide specifics, saying that SBC does not comment on pending partnerships. "SBC is going to have the ability to appeal to many niche markets, so we're definitely very interested in content that will help us achieve those goals," Coe said. "The fact is that you don't need a large audience anymore to be economically viable as long as you're part of a larger network."

Another niche content provider and New Tier rival is NEWGame Communications, which teamed up with Texas University's football department this year to produce a dedicated online video magazine for $25.

Preliminary tracking data, released earlier this month by NEWGame, showed that 21 percent of the subscribers clicked-through to the Longhorns online store, which is obviously another opportunity for Texas to generate revenue from the operation. What's more, there appeared to be a strong viral element to the video magazine, as 22.5 percent of those who viewed the latest "Vmag" forwarded it to a friend.