ABC has reached a deal with its affiliates to allow them to stream primetime network shows on their own Websites, and has expanded the slate of shows it will stream on ABC.com.
While new episodes of several returning and new series will stream on ABC.com the day after they air on TV, the affiliates can feature the newly redesigned broadband player on their own Websites and sell local advertising against it. The affiliates, who will promote the player on air and online, will keep all revenue associated with those sales, the first time a national broadband player will carry local ads.
"This partnership is about keeping a local presence and having an ad-supported medium nationally and locally," says Deb McDermott, president of Young Broadcasting and chair of the ABC affiliates broadband committee. "We bring a lot of marketing power to the relationship."
ABC is expanding the broadband player from the four series it offered last spring to seven this fall. They are returning series Lost, Desperate Housewives, Grey's Anatomy and new shows Six Degrees, Ugly Betty, The Knights of Prosperity and The Nine. In general, four episodes of each series will be available and the site will also include half-hour promotional programs of Lost, Desperate and Grey's to help viewers catch up on last season.
ABC is still finalizing deals with the national advertisers who will participate in the fall streaming. Last spring's two-month streaming on ABC.com included ten advertisers and notched 5.7 million episodes streamed.
The new deal comes after ABC included five local stations (ABC-owned KABC and four affiliates) in its streaming test last spring. In the test, the stations linked back to the ABC.com player, rather than featuring a player on their own Web sites.
Now that stations will be able to house a player on their own sites and integrate local advertisements, affiliates will have financial incentive to promote the downloads in their local newscasts and promotions, a motivation they lacked when there was no financial upside attached to the network's online moves.
The four major broadcast networks have all strategies for dealing affiliates in -- or not -- to their online distribution plans.
Some Fox O&Os are streaming shows on their sites and affiliates have expressed interest. Fox affiliates will receive 12%-25% of revenue from new digital distribution. In return, they agreed to phase out most limitations on re-purposing shows and continue supporting the Fox NFL deal. Until usage climbs, however, stations' revenue will be modest.
Under a deal that allows CBS more freedom to stream shows online and to VOD, the network's affiliates will receive a cut of proceeds, including incentives for driving traffic to CBS' Website and other network platforms where they sample ad-supported CBS fare.
Like Fox affiliates, CBS stations will continue to chip into the network's NFL deal for the next three years.
So far, NBC affiliates do not get cut of its iTunes deal, but the network and its affiliates have formed a new online video syndication service, the National Broadband Company, which allows stations and the network to share video with each other and third party sites and receive a cut of ad sales.
Under terms of the pact, ABC will take three ad spots in any streamed drama and give stations one spot for local ads. In a half-hour show, the network will have two spots and affiliates will get one.
As the two parties negotiated, "The ability to place local inventory on the video player was a high priority for the stations," says Ray Cole, Chairman of the ABC affiliates board and president/COO of CitadelCommunications Co.
ABC is rolling the new venture out slowly in local markets. At first about a dozen stations, including the five from last spring's streaming test (WFAA Dallas, WATE Knoxville, KABC Los Angeles, WISN Milwaukee and WFTV Orlando) will participate in a test period and other affiliates should launch their versions as early as November.
Initially this fall, just the players on the local stations’ Websites – and not the one on ABC.com - will bear their branding and ads. Later this year, ABC plans for the player on ABC.com to carry the local stations’ branding and ads, depending on where the user logs on.
“This is really about looking at a world where the broadcast network and the local affiliates have the same brand presence and content offerings in their respective areas,” Disney-ABC TV Group Executive VP, Digital Media Albert Cheng tells B&C.
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