VOD to the rescue for TV

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The Hollywood studios are killing two birds with one stone, and their weapon is something called VOD.

To combat foreign piracy and to attract younger audiences abroad who, like their American counterparts, want their shows whenever and wherever, they increasingly are focusing on such newfangled deals. So far the money is limited, but it has only one direction to go.

Such deals with foreign broadcast partners may not only create a new revenue stream but also keep their traditional output and volume deals with those broadcasters from taking a hit. The trend promises to be front and center in Cannes at MIPCOM, which begins Monday.

Gallic broadcaster TF1 has responded to the increasing illegal Internet downloads by signing a deal with NBC Universal to air episodes from Season 2 of "Heroes" on its VOD site just 24 hours after the original U.S. broadcast (HR 9/26).

Disney-ABC International Television and Channel 4 Finland inked an IPTV VOD agreement to bring hit U.S. network series on-demand to viewers for up to four days after their U.S. TV broadcast. This is the first time Disney has introduced multiple network series to an international market so soon after broadcast in the U.S.

TF1 plans to evaluate the effectiveness of this before offering similar quasi-simultaneous broadcasts with new seasons of other popular U.S. series. "The first results (for the 'Heroes' offering) are sufficient because we've beaten our sales record for any program," TF1 Vision director Pascal Lechevallier said. "But the number of pirated files still remains too high for us to be totally satisfied."

Beth Minehart, executive vp international new media at NBC Universal International Television Distribution, who was central to the TF1 deal, said that the studio is "actively talking to many people in many markets about similar types of contracts." The new series "Bionic Woman," she added, would be a perfect candidate.

She also said that NBC Universal will look to expand its relationship with TF1 to include other series. "We spent a lot of time trying to sort out the best business models (to counter fan-based piracy)," she said. "TF1 is an important partner, and they, too, obviously had concerns about the issue because France is a heavily pirated market."

The VOD arrangement with TF1 has other elements, including the ability to purchase Season 2 of the series on DVD. "We are creating an environment in France — depending on how hungry people are for the show — to wait (for the over-the-air broadcast) or buy it on DVD."

One of the first to raise the red flag to fan-based piracy was Marion Edwards, president of international television at 20th Century Fox, who revealed that this season's premiere of "Prison Break" was on the Internet within 11 minutes of its broadcast.

"A year and a half ago at NATPE, we saw a demonstration that revealed that '24' was up on the Internet almost simultaneously with its U.S. broadcast, and that is a big challenge for us all," she said. "The difference today is the proliferation of the problem. That's why you are seeing so many VOD deals being done, and that's why broadcasters want free on-demand catch-up.

"If we do nothing and just throw our hands up, our business will be gone," she warned.

Another international executive keeping a close eye on VOD developments is Armando Nunez, president of CBS Paramount International Television, who noted that "broadcasters around the world" are looking to get U.S. programs on the air much faster these days. "Is that going to fix the problem? No, it's not in itself," he said. But he emphasized that there is a strong desire on his studio's part to continue to work with broadcasters to make content available to viewers through the broadcasters' own platforms.

Also looking closely at the digital environment is Jeffrey Schlesinger, president of Warner Bros. International Television Distribution.

"In the past, international broadcasters have had the luxury of deciding when they want to put shows on, and it could be six months or a year after the U.S. premiere," he said. "That window has changed, and the current situation is not unsimilar to that of features, where the solution was to release day-and-date or close to the U.S. release date. That could mean with broadcast (that) it would be a day-and-date airing with the U.S. in English-language territories or at least much closer to the U.S. broadcast. Non-English-language territories would still broadcast programs on a delayed basis, to allow for dubbing.

"Part of the solution might also be what NBC Universal has done with TF1 and 'Heroes,' which might give a boost in dubbed territories where the local-language premiere is still the priority," he added. "If it's inevitable, you might as well be a part of the process yourself and benefit from it."

Schlesinger stressed that shows like "Heroes" command an audience that is suited to this model because they are serialized and appeal either to sci-fi fans or to a youth audience that knows its way around the Internet. "They are already online and already know how to get this programming shortly after the U.S. broadcast," he said. "They have an urgency to find out how story lines resolve themselves.'' He added that with assurances of real safeguards, these kind of deals will become more commonplace.

Noted Edwards, "VOD won't kill piracy, but hopefully as we get more into these rights, people will feel less likely to steal when the same program is available on broadcasters' own sites."

Rebecca Leffler in Paris contributed to this report.
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