CBS, Affils Strike Digital Deal
By Allison Romano -- Broadcasting & Cable, 6/29/2006 12:47:00 PM
CBS and its affiliates have agreed on the framework for a new revenue-sharing agreement that clears the way for the network to distribute its content on digital platforms and deals affiliates in on potential profit.
The pact, announced Thursday, gives CBS more flexibility to funnel shows to the Internet, video-on-demand (VOD) and other emerging platforms. In return, stations 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.
Also as part of the deal, CBS stations will continue to chip into the network's NFL deal for the next three years. Several station groups, including LIN Television, Gannett and Meredith Broadcasting, have already approved the terms, and now the full affiliate body must also give their approval.
CBS and its affiliates have been working on the agreement for months. As the broadcast networks have rushed to put their content on the Internet, iTunes and VOD, affiliates have balked that they play a key role in making shows popular and should be included in profits.
Fox recently reached an agreement with its affiliates to distribute more content on emerging platforms in return for stations receiving about 12% of related revenue. NBC and ABC do not have such deals with their affiliates but have said they are working on ways to partner with stations. NBC is creating a new Web portal, the National Broadband Company, with its stations and ABC included in a handful of stations in its free streaming trial that ends June 30.
The exact terms of the CBS deal were not disclosed, but executives say both sides will benefit.
"In a rapidly changing multiplatform, multimedia universe, CBS and its affiliates must develop new business models and methods that best position us to maximize revenue and branding opportunities," Freedom Broadcasting President Doreen Wade, chairman of the CBS affiliates board, said in a statement. "This agreement moves us in the right direction, recognizing the unique programming and promotional value that both parties bring to network broadcasting."
"We recognize that, in today’s marketplace, it’s in our collective long-term best interest that the Network and the affiliates each leverage the full value of the assets they own," said Peter Schruth, president, affiliate relations, CBS Television Network.
