America Online Inc. and Warner Bros. Entertainment Inc. are planning to put thousands of episodes of once-popular television shows like "Welcome Back Kotter" and "Chico and the Man" on the AOL.com Web site, where high-speed Internet users can view them for free.
The new In2TV service is set to launch in January and will include episodes of more than 100 shows.
Company officials, scheduled to announce the service today, said the shows will be available on demand, meaning computer users who search six new Web-based television channels on AOL.com will be able to choose when they watch the shows and which episodes to view. The companies, both part of media giant Time Warner Inc., will profit by sharing revenue from advertising, including banner ads and four 15-second streaming video ads per 30-minute episode.
In an interview, Kevin Conroy, executive vice president of Dulles-based AOL's media networks division, said this has the potential to increase traffic on America Online's network of Web sites, which includes MovieFone, Mapquest and AOL's instant messaging service, AIM. AOL has about 112 million users monthly on those sites, and its AIM network can be used with the television broadcasts to enable computer users in different places to watch shows together.
"From AOL's perspective, this does mark a big first," Conroy said. "For the first time, we are giving today's high-speed Internet users the chance to interact with television in a big way. We are creating a new distribution platform at a significant scale for television content. We made the decision to bring this to market in an advertiser-supported model to be in sync with where the market is, and where it is going. The market for online advertising continues to grow."
The announcement comes amid a blizzard of new initiatives involving television and the Internet that have been unveiled recently. Major television networks plan to offer episodes of certain popular series, as well as nightly news broadcasts, on the Internet whenever computer users want to watch them, and Apple Computer Inc. is rolling out a new array of television content for mobile iPod users.
Eric Frankel, president of domestic cable distribution for Warner Bros., said In2TV would launch with interactive games and six channels: LOL, the laugh-out-loud comedy channel; Dramarama; Heroes and Horrors; Rush, with "Kung Fu" and other action programming; and Vintage, which will feature "F Troop," the once-popular western "Maverick," and "Growing Pains," in whose later episodes starred a young Leonardo DiCaprio.
"What we are finding is that everyone who is a big movie star started on television and had recurring or cameo roles," Frankel said in an interview. "We have 4,800 episodes available during the first year." Two additional channels are in the works, he said, adding that computer users would have immediate access to new puzzles, trivia games and ways to interact with the programming itself.
In2TV is part of AOL's new strategy to increase the size of its audience by giving away content for free and profiting from advertising. Time Warner is in talks with Google Inc. and Microsoft Corp., both of which have expressed interest in either buying a minority stake in AOL or finding a way to partner and then share the increased ad revenue that could be generated.
As early as this week, Time Warner may decide to negotiate exclusively with just one of AOL's two suitors, according to sources familiar with the talks who spoke on condition of anonymity because the details of negotiations are secret.
The preliminary talks between Time Warner and Google appear to be the most promising, sources said, in part because Google is already the search engine on the AOL service, they have partnered for years, and they have figured out a basic structure that would benefit both companies in a joint venture. One possible scenario is that Google would find ways to send more Internet users to AOL's network of Web sites, and the parties would share the increased ad revenue. Google is working on devising the best way to do that without compromising its search results. The focus is on increasing the number of users on AOL's network of sites by giving America Online a new way of bidding on keywords that trigger ads on Google.
Alternatively, Time Warner and Microsoft are discussing a less likely scenario that would involve putting the AOL and MSN advertising networks together, an increase in scale that would enable one-stop shopping for advertisers.
America Online Inc. and Warner Bros. Entertainment Inc.'s In2TV is slated for a January launch.