America Online Inc. and Microsoft Corp. yesterday announced separate deals with news organizations to add new video features to their Web services, developments that underscore how more mainstream media channels are going online.
America Online's news channel, AOL.com, will feature CBSnews.com content and video on its home page. Separately, Microsoft's MSN and the Associated Press announced a partnership to develop an online video network that will stream video news feeds to Web sites that subscribe to AP's wire service.
These are the latest in a series of recent moves by companies to increase access to digital video programming. This week, for example, Comcast Corp. said it would sell hit shows from CBS such as "Survivor" and "CSI: Crime Scene Investigation" for as little as 99 cents an episode. Satellite television provider DirecTV Group Inc. announced a similar deal with NBC Universal Inc., which will sell commercial-free episodes of its hit shows.
Also, Apple Inc. started selling videos and television shows on its iTunes online music store, and Internet giants such as Yahoo Inc., Google Inc. and others are enhancing video features on their sites as a way of making money selling subscriptions or advertising.
"Online, the goal is to provide the new news experience," which means being able to read a story, view a video and interact with the news on a blog, said Lewis D'Vorkin, vice president and editor in chief of AOL news and sports. AOL.com, which has 3 million daily users, already offers video content from CNN, ABC, AP and Reuters news networks.
Viewers look to online news because they want video on demand or because they want to view coverage that makes them feel as if they are experiencing a hurricane, for example, or political debates, D'Vorkin said.
AOL makes money by selling 15- to 30-second advertising spots that precede the video clips.
The AP-Microsoft deal, meanwhile, is structured so that AP will provide the content, and Microsoft will supply the underlying technology to deliver video to more than 3,500 U.S. newspaper and broadcast organizations that subscribe to the AP service. AP will distribute about 50 video clips a day for the subscribers to use on their Web sites, covering national, international, entertainment, technology and business news. Effectively, the deal will allow smaller news sites with limited resources to put video on their Web sites. Microsoft will also provide the Windows Media Player software and a system for posting local ads along with the clips.
Subscribers to the AP network will not be charged extra for the video feeds, although Microsoft and AP will share the ad revenue generated from the project. The service will launch in the first quarter of next year.