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AOL, Warner Bros to launch TV service

By Kenneth Li
Reuters
Monday, November 14, 2005; 5:44 AM

NEW YORK (Reuters) - Time Warner Inc.'s <TWX.N> AOL said on Monday it planned to launch a free Internet television service by early 2006, in one of the technology and media industry's most ambitious designs to reach TV viewers online.

Yahoo Inc. <YHOO.O> and Google Inc. <GOOG.O> threaten to bypass traditional media outlets by linking computer users with TV shows online, striking partnerships with programmers, or create it themselves, but what they lack AOL now possess in abundance -- the shows themselves.

The advertising-supported service, In2TV, will feature approximately 3,400 hours of programing from 4,800 episodes spanning 100 series of Warner Bros.-produced shows from the past in its first year in an exclusive deal.

They include past primetime hits "Welcome Back Kotter," "Growing Pains" and "Kung Fu" organized under six channels divided by comedy, drama, animation, action, classic and superhero/villain genres. Two more may launch in 2006.

Over time, Warner Bros. could add up to 14,000 episodes from 300 series it has currently cleared with rights holders, executives said. AOL is also currently in talks with "every major provider" to offer shows not owned by Time Warner, Kevin Conroy, executive vice president of AOL media networks said in an interview.

ONE PLUS ONE EQUALS SEVEN

In2TV has been two and a half years in the making, executives said, and to date remains one of the most aggressive displays of collaboration among the corporate siblings of world's largest media conglomerate once riven by dissension and infighting after the 2001 merger of AOL and Time Warner.

"The great promise behind this legendary merger was there would be synergies," said Jupiter Research analyst Todd Chanko, who was briefed on the service ahead of the announcement. "Here, you have a great example of two sister operations with mutual needs being satisfied by the other. It's a no lose proposition."

Working with a corporate sibling was "better than spending $100 million" to build a service from soup to nuts, Eric Frankel, president of Warner Bros. domestic cable distribution, told Reuters.

Invoking phrases eerily reminiscent of the unkept promises of the merger, Frankel added, "We're hoping one plus one equals seven."

Indeed, with some 112 million unique monthly visitors to AOL's online properties, the company has been quickly restructuring the company to attract even more by offering more free programing, through which it can sell online advertising to offset a quickly declining dial-up subscriber base.

AOL has also been in discussions for an alliance or a sale of a stake in the division to Microsoft Corp. <MSFT.O>, Google Inc. and Comcast to reach a wider audience.


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