ABC Strikes Broadband Deal With Stations, Will Offer Local Spots

In striking a wide-ranging digital-programming deal with its stations, the Disney-ABC Television Group has separated itself from other network competitors--it's including a local ad component.

Using the ABC.com TV player, ABC's affiliates will get to sell one local ad spot per airing of each ABC prime-time episode on local-station Web sites. Seven prime-time shows are included in the deal, which will begin running on Sept. 23. Episodes will be offered free to consumers on ABC's Web site the day after their broadcast premieres. About four episodes per series will be available at any given time.

ABC says it will be the first time local TV ads can be inserted on a nationally operated broadband video player. ABC's entire two- or three-spot commercial load will be sold to just one national advertiser. Users can go back and forth in viewing different "chapters" of an episode--but they won't be able to fast-forward through commercials. ABC affiliates also agreed to an undisclosed level of promotion for this deal through traditional TV, radio, or other media.

For dramas, there will be a total of four 30-second commercials in each episode. ABC keeps three ad spots to sell to national marketers; one will be sold locally by ABC affiliates. For sitcoms, three 30-second commercials will air--two to ABC, and one for ABC stations. ABC's prime-time shows--sans the local advertising spot--also run on ABC.com.

Six of the seven shows are from ABC's sister TV production company, Touchstone Television: "Lost," "Desperate Housewives," "Grey's Anatomy," "Six Degrees," "Ugly Betty" and "The Knights of Prosperity."

Earlier in the week, Warner Bros. Television's "The Nine" also struck a similar deal. The difference is that Warner Bros. gets the entire rights to the paid, ad-free downloads of the show. ABC affiliates don't get a cut of any ABC shows that are downloaded, ad-free, for a fee.

ABC's deal is different than the deals Fox and CBS made with their respective stations. Those deals use just one national player--where three or four spots are sold only to national advertisers. In return, those stations get anywhere from 12.5 percent to 25 percent of the total ad revenues--calculated for their own local market. But they don't get to sell any local advertising time.

"Those stations are still at the mercy of how the network is selling those spots," says Ray Coles, chairman of the ABC affiliate board of directors and president of Citidal Communications, which owns three ABC affiliates and one CBS affiliate.

"We wanted our stations to have the ability to sell local advertising and retain all the revenue," he adds. "In future versions of the TV player, we will be able to do local sponsorship." Right now, he says, ABC can sell a national banner Web site ad for a national video advertiser.

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