Traditional media/TV turn to a three-screen distribution strategy

ABC-Disney has signed its second major video deal with Veoh, which will show full episodes of prime-time shows like ‘Lost’, ‘Desperate Housewives’ and ‘Ugly Betty’, along with short clips and game highlights from ESPN.

This is the second such deal from the company after its agreement last year with AOL. Under its terms, Veoh will use the ABC media player to show ABC and ESPN programming on its site. ABC-Disney is also considering other distribution deals with sites such as YouTube and Hulu.

Veoh, backed by former Disney CEO Michael Eisner, recently received a substantial USD30m round of funding. The firm now hopes the deal will help it become the hub for all full-length TV shows. Veoh also has some shows from CBS and MTV as well.

While not significant in terms of scale, this deal is important as it reflects a trend that studios began to identify back at MIPTV 2007: a ‘three screen’ distribution strategy that would provide them with traffic and significant online audiences, allowing studios to generate more revenue from advertising.

Earlier this month, Warner Brothers Television completed a similar deal with DailyMotion, Veoh, Joost, Sling Media and Tivo for channels scheduled to launch in September. Both ABC-Disney and Warner Brothers Television deals are significant as they slowly but surely see studios and major content providers moving towards something that seemed impossible two or three years ago: open network distribution.

This is a shift for the traditional TV industry and expect to see studios to pursue this policy with vigour. Not only will they look to expand their syndication business into top web TV portals, but some studios may experiment with social networking sites.

However, there are two additional aspects of this new ‘three screen’ strategy:

Firstly, ABC-Disney’s deal with web TV sites extends the studio’s existing platforms or portals, and is used as a ‘key’ traffic generator, allowing brands a presence on, what media executives coin, the ‘third screen’ or PC. At this stage, this strategy puts ABC-Disney content upfront and centred around emerging free or mass web TV audiences. Studios see this move as a fast way of attracting publicity for its core TV products, such as upcoming series, and extending the shelf-life of some archive material.

Secondly, it may be that both ABC-Disney and Time Warner have timed their web TV deals to coincide with the broadcast industry’s ad-selling season in the US, which typically kicks off at the end of May/early June. As the major networks unveil their fall schedules to advertisers, the new web deals may help the studios in their ad negotiations. Under the new syndication arrangements, both studios might be able to generate more revenue as they negotiate ad-placement deals across traditional broadcast/terrestrial, cable networks, and now the internet.

Published by Reinout te Brake

Reinout is a games investor and strategic business consultant specializing in the games industry. Reinout established his credentials through his own successful investments, start-ups, consulting and (advisory) board positions that led through time to strong bonds with key stakeholders in this fast paced industry. He is known for his outstanding results in the gaming industry. He has worked with many game studios around the globe and is therefore well known in the international gaming industry. Check out his games podcast;

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