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Google the Talk of NATPE

Jan 23, 2006  •  Post A Comment

For many producers converging at the National Association of Television Program Executives conference in Las Vegas this week, one question is sure to stand out: How will Google Video affect their business?

Earlier this month Google debuted a content distribution platform that allows creators to sell any video online-from a promotional clip to a feature-length film-at prices set by the provider. To cut down on piracy, a video’s terms of use are also adjustable, with the options ranging from limited-time rental to unlimited use.

Unlike iTunes, AOL, Yahoo and other broadband content distributors, Google Video has an open architecture that allows virtually anybody to sell video on their own terms. The other companies have thus far been striking individual content deals with individual companies.

But the number of questions surrounding the Google platform means producers will be cautious about making broadband deals at the conference, said Will Richmond, president of the consulting company Broadband Directions.

“Google is going to stimulate a lot of interest among producers at NATPE who want to explore this new potential revenue stream,” Mr. Richmond said. “NATPE is going to have a lot of representation from broadband video aggregators and distributors interested in making deals. There’s a ton of excitement from all parties, but everyone agrees that the business models are still nascent, so deals that are struck will be short-term and largely non-exclusive for now.”

Questions that cannot be easily answered with a simple Google search abound.

Among the potential upsides of the platform: It could amount to a direct way for television producers to sell their programs to consumers and bypass networks. On the other hand, producers may find it even more difficult to break out from among potentially thousands of homegrown efforts than it is to compete on traditional TV platforms.

What’s more, Google’s easy-to-use interface could make existing broadband distribution deals irrelevant.

Eric Schotz, president and CEO of LMNO Productions, said his primary concern about making a deal with Google remains copyright protection.

“In terms of production companies it’s an interesting play because we’re always looking for arenas where we can take our material and exploit it,” said Mr. Schotz, whose company produced NBC’s “Race to the Altar” and SoapNet’s “I Wanna Be a Soapstar.” “What still scares you is if there’s a way to download it and send it to 45 friends.”

One potential new use for the platform is to provide a sales venue for extra episodes of canceled series. If a production company makes 13 episodes, but the host network runs only eight, the production company could sell the remaining shows on Google Video. A production company could also offer an unaired pilot there.

“If you’re going to have product like busted pilots or short-order series, and if there’s a way to pull some revenue out of that and get some eyeballs, people will definitely do it,” said Peter Schankowitz, president of worldwide development for Vin Di Bona Productions, which produces “America’s Funniest Home Videos.”

Eric Korsh, chief operating officer of “Queer Eye for the Straight Guy” producer Scout Productions, plans to meet with companies that will allow him to stream content from his own Web site, but wonders how Google will change the distribution model.

“A big question is whether or not they will see themselves as supplementing broadcast and/

or cable as an alternative or additional distribution outlet, or as replacing those things in a more competitive environment,” he said.

Mr. Korsh also noted that the added distribution platform of Google Video won’t change the fact that a company still needs to pay for the original production of the content-and, for now, that means networks.

“We don’t think it will change things too drastically,” Mr. Korsh said. “We still get a network license fee to make our shows. You could initiate content on the Internet, but there’s no established model for that. Once those online distribution models come with some advanced methods of funding and that can be tied into upfront development costs from alternative distributors, that could change.”

Mr. Schankowitz agreed. “You can’t make a major prediction that it’s going to swallow television … If you look at the history, [such advances] typically create another platform rather than shutting one down.”

Most producers interviewed for this story said Google Video has the potential to be a painfully democratic platform, where a video clip of the “Star Wars Kid” can compete for viewers with the best HBO has to offer.

“What’s interesting about it is it creates an open venue for all content producers for small guys or big guys. That’s a big break with the way video has been distributed in the past,” Mr. Richmond said. “I think it’s conceivable that eventually small producers can launch online, then carry over into the offline realms.”

Bob DeBitetto, executive VP and general manager of A&E, agreed that quality content will rule more than ever on the new platform, but also said networks will retain an enormous advantage.

“We always say content is king, but when we’re talking abut proprietary and open architecture systems, it will live and die by the creative,” he said. “Still, you still need the marketing muscle to create the demand.”