Affils: Exclusivity is Dead

Apr 17, 2006  •  Post A Comment

The land rush for new ways to parlay network programming into new network revenue streams has done to affiliates’ exclusivity rights what the Ice Age did to dinosaurs.

Many affiliates say any notion that they can leverage networks into preserving vestiges of exclusivity is unrealistic.

Ask stations affiliated with Disney’s ABC, which last year became the first network to make prime-time programming assets available on-demand to a new partner, Apple’s iTunes. ABC didn’t tell its local stations at the time it was reviewing its vows of exclusivity.

ABC’s announcement last week that it is making ad-supported current episodes of “Lost,” “Desperate Housewives,” “Commander in Chief” and the entire season of “Alias” available for streaming on ABC.com in May and June didn’t catch affiliates by surprise. It did, however, catch them in mid-conversation about how the network might compensate the affiliates for the further loss of exclusivity.

Fox Broadcasting has just agreed to cut its affiliates in on any revenues that result from on-demand extensions of its programming. And CBS appears poised to make a similar arrangement with affiliates.

But stations’ participation in the profits from prime-time shows being available on-demand does not change the undeniable fact that by making shows available via any distribution means other than affiliates, the local stations lose the clout that comes with being able to offer viewers and advertisers something no one else can.

NBC Enters Repurposing

Limits on the networks’ rights to repurpose prime-time programming or distribute shows outside their traditional primary prime-time runs have largely been negotiated as part of sports cost-sharing agreements. The local stations agreed to help defray the cost of the networks’ major sports contracts in return for the networks agreeing that the majority of its programming would remain exclusive to affiliates in the programs’ first runs.

NBC, the only one of the Big 4 broadcast networks that has never had a written repurposing agreement with its affiliates, announced in April 2000 that it would repurpose “NBC Nightly News” after its network broadcast on Pax stations. But NBC abandoned the plan after the affiliates howled that such a move would siphon viewers away from “Nightly” on their stations.

Now “Nightly News” and “Meet the Press With Tim Russert” are available on-demand on MSNBC.com immediately after their West Coast network broadcasts.

NBC recently opened new territory when it prepurposed midseason drama “Conviction’s” first episode for free on iTunes before the Dick Wolf show premiered on NBC.

CBS put a spin on prepurposing with its deal with Yahoo to create a “60 Minutes” microsite starting next fall that will offer content related to stories on the newsmagazine.

Most news coverage of the “60 Minutes” deal said the content would go up on the Web after the newsmagazine’s network broadcasts, but that was based on presumption. What the network didn’t announce was that the content goes up on the Yahoo site before the conclusion of the East Coast broadcast of “60 Minutes” and before the magazine is broadcast in later time zones.

Whetting Appetites

CBS argues that the content does not duplicate the “60 Minutes” stories. In a preview two weeks ago “60 Minutes” broadcast an extended interview with Tiger Woods. Yahoo offered myriad short clips: Mr. Woods bouncing the golf ball off his club and hitting balls at a cameraman (both featured in the interview), along with career highlights. The clips started with a plug for Buick featuring Tiger Woods.

CBS regards the Yahoo deal as a way to whet viewers’ (especially young viewers’) appetite for the “60 Minutes” broadcast, not as a substitute for it.

But many affiliates see it as a disturbing twist that sets a precedent they hope the CBS affiliates advisory board will protest.

As for ABC, the network maintains that after testing the popularity of its ABC.com broadband offerings, which include ads that viewers cannot skip, it believes it will have a better sense of the format’s potential when it talks to affiliates.

ABC affiliates suggested that in addition to revenue sharing, other promising options might include offering links to the broadband offerings on the Web sites of the local stations, which then might be able to attach locally sold ads.

“The key here is whether or not the networks are really going to demonstrate they value what these stations do in exposure of network programming,” a station group executive said.