By Christopher Lisotta and Daisy Whitney
It took a sharp-eyed matchmaker and a chance encounter on a hotel rooftop to forge the multimillion-dollar deal that last week made partners of Microsoft’s MSN Web business and Ben Silverman, who created the reality series “The Biggest Loser” and executive produces the U.S. remake of “The Office.”
The relationship might never have been formed without media analyst Mitch Kanner, who was meeting with Microsoft executives at the SoHo House in New York. Mr. Kanner was telling the Microsoft group that to bolster original programming on MSN, they needed a Ben Silverman.
Coincidentally, Mr. Silverman was sitting two tables away.
“He’s literally right here,” a surprised Mr. Kanner told the Microsoft executives as he spotted Mr. Silverman.
The resulting partnership shows that the biggest Internet companies are hedging their bets when it comes to choosing programming for the Web, tapping Hollywood professionals and exploiting the boom in Internet video-sharing. AOL already has a deal with “Survivor” executive producer Mark Burnett, while Yahoo works with Michael Davies, who executive produced “Who Wants to Be a Millionaire.”
“Everybody is recognizing that broadband is becoming a legitimate video distribution platform, and it’s just natural that as a recognition like that occurs, that all roads lead to the people who know how to create quality video content,” said Will Richmond, president of research firm Broadband Directions.
Internet companies are becoming more willing to pay for content that will set them apart from rivals, said Jon Vlassopulos, VP of new media, business development and strategic planning for production company Endemol USA, which produces NBC’s “Deal or No Deal.”
“In the last 60 days they have now started commissioning budgets to go after programming,” he said.
Other Hollywood producers are talking to online video portals. Arthur Smith, the CEO of A. Smith and Co. and the producer of Fox’s “Hell’s Kitchen” and “The Swan,” said he is in active discussions with entities such as MSN to produce original content.
Microsoft’s agreement with Silverman’s company, Reveille, is part of a broader initiative dubbed MSN Originals to partner with the “best and brightest in the creative community,” said Rob Bennett, general manager of entertainment and video services for the Internet service. MSN last week also forged a relationship with multimedia producer BeJane to create women-targeted home improvement content.
Microsoft’s decision to buy original content marks another shift in the quickly changing online video landscape. Yahoo, which hired former ABC Entertainment Television Group Chairman Lloyd Braun to run its content business, in March pulled back on its development of original shows. Meanwhile, AOL has been chugging forward with original reality shows for the Web and with its In2TV service.
“MSN looks at this as a huge emerging market and wants a piece of it,” said T.S. Kelly, VP and director of research and insight for Media Contacts, the interactive arm of media agency MPG.
Google, the world’s biggest search engine, has taken a different approach. The company has struck licensing deals with CBS and the NBA. Google Video also offers user-generated content. It isn’t pursuing originals, said Jennifer Feikin, director of Google Video.
“We are about aggregating other people’s content,” Ms. Feikin said. “We are not in the business of creating content.”
Google is exploring how to leverage its strength in search advertising with its Google Video service so the clips can be paired with relevant ads, she said.
Reveille and MSN are in talks with advertisers about including marketers in Mr. Silverman’s projects from the get-go, Mr. Bennett said. Securing a sponsor for one of the Web shows would make it profitable from day one, he said.
“We have been approached by a number of major brands who want to look for deeper ways to integrate into stories with great content,” Mr. Bennett said.
MSN does not disclose ad revenues for its video business, but income from online video in 2006 will quadruple from last year, he said.
The Reveille deal calls for eight Web shows. Unlike traditional creator-broadcast network deals, which tend to be set in terms of one, two or three years, Mr. Silverman described the relationship as a “project-oriented deal.”
Projects include a program for cellphones called “Airplane,” which stars Tom Arnold. Mr. Silverman described the show as “‘Reno 911” meets “The Office.”
Other shows include the pop culture-driven “Face Off,” from Woody Thompson, who created VHI’s “Pop-Up Video.”
The shows in the slate will vary in length from two to 22 minutes, Mr. Bennett said. The programs will include features that let viewers communicate online with others in the audience and with cast members.