ABC Deal Stuns Affils

By Allison Romano
Broadcasting & Cable

4/17/2006 7:58:00 AM

http://www.broadcastingcable.com/article/CA6325082.html?display=Breaking+News


Six months after ABC shocked its affiliates by cutting a deal with Apple to 
sell some of its shows on iTunes, the network last week unveiled an 
online-distribution deal that once again bypasses ABC stations, raising new 
concerns for local broadcasters.

In May, ABC will launch a two-month trial to make four hit shows, including 
Lost and Desperate Housewives, available on its Web site. Unlike the iTunes 
offering, where users buy episodes for $1.99, the repeats on ABC.com will 
be free, potentially widening the appeal.

The development alarms station operators, many of whom say privately they 
risk losing prime time viewers and undermining the promotional platform for 
local news, a station's biggest moneymaker. Publicly, though, local 
broadcast executives reacted cautiously.

"We are living in a world where we all need to experiment, but I caution 
[the network] not to push it so far they undermine the core business," says 
Gannett Broadcast President Roger Ogden, whose company owns three ABC outlets.

ABC executives briefed some station owners on the plan April 10, the day 
the deal was announced. Most did not have advance notice of the iTunes deal.

A major sticking point for affiliates is sharing potential revenue. As ABC 
and the other broadcast networks offer their shows online and through 
video-on-demand, stations want to be included in any revenue from 
subscriptions or advertising. Without the local stations, managers contend, 
the networks' shows would not gain the exposure necessary to attract 
interest on new platforms.

Stations are also interested in new technologies, such as an offering from 
technology firm Decisionmark being tested by CBS affiliate WRAL Raleigh, 
N.C., that would allow stations to stream network shows on their Web sites 
but only to their markets.

ABC has told affiliates it will consider ways to give them a piece of the 
action. Those discussions are expected to be at the forefront of the 
affiliates meeting in New York in May. "We have been partners with ABC for 
a long time and will continue to explore new ways to build audiences," said 
Belo Corp.'s President of Media Operations Dunia Shive.

At the same time, stations are intensely focused on delivering their own 
local products, including their Web sites and digital broadcast channels, 
to grow revenes. Says Clear Channel Television exec Don Perry, "As long as 
our relationship with local viewers is intact, we're going to be fine."


================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923  Fax: 713-743-3927
antunes at uh dot edu



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