• by Wayne Friedman , David Goetzl  @dgoetzl, May 10, 2006

For the first time, affiliates will benefit from their parent network's iTunes distribution. Fox affiliates will receive part of the revenue from downloads of hit shows such as "24" and "Prison Break."

Fox yesterday began offering downloads of the two dramas, as well as comedy "Stacked" and reality series "Unan1mous," at $1.99 a download. And under a recently completed six-year deal, affiliates will receive 12.5 percent of the revenue after iTunes operator Apple takes its cut.

Cable networks under the Fox umbrella--FX, Speed, and Fuel TV--also have programming now available on iTunes whereby the News Corp. unit does not share the revenue. In total, Fox Entertainment Group has 16 series for sale, including several from the 20th Century Fox library.

CBS is now the lone major network without a deal to distribute programming on iTunes, although negotiations are ongoing. A CBS representative said: "We are in continual talks with our affiliates about a number of issues, including how we can better work together to leverage our content in the digital world."

NBC and ABC offer some of the most downloaded programming on iTunes, but neither network shares revenues with its affiliates--a major point of contention. Affiliates believe the off-net distribution threatens to upend the traditional network-affiliate partnership, in part since their airwaves raise awareness of the shows. Executives at both NBC and ABC, however, have argued that affiliates are benefiting from iTunes distribution--since it leads to increased sampling, resulting in higher ratings.

Beth Comstock, NBC Universal's president of digital media and market development, recently told a gathering of local station executives that NBC's offering "The Office" on iTunes has been a boon for its affiliate base. "Making our TV programs available on new platforms does not cannibalize our TV audience, but in fact has the ability to attract new viewers," she said. "'The Office' has had its largest audiences on the NBC network since we made episodes available on iTunes. While you can't attribute it solely to iTunes, this enhanced exposure has certainly been good news for the network--and our affiliates."

Fox took a more inclusive approach by agreeing to give affiliates a cut of all revenues from distribution on nonlinear platforms--part of a broader deal where affiliates will help defray the network's NFL rights fees. Affiliates receive 12.5 percent of revenue from either ad sales or subscriptions for programs that run on iTunes, the Internet, VOD, mobile phones, or elsewhere after they air on the network, and 25 percent if the programs run on new media outlets before the network window.

Cable programs from the Fox Entertainment Group now available on iTunes include FX's "The Shield" and reality series "Black. White." "Buffy the Vampire Slayer" and "Lost in Space" from the 20th Century Fox archives are also for sale.