Warner Bros. Television Group and Disney-ABC Television Group are pressing the reset button on their digital deal for primetime programs.
The studio will get an unprecedented lock on advertising revenue derived from online rebroadcasts next season. The deal covers four series WBTV supplies to ABC: “Pushing Daisies,” “Big Shots,” “Men in Trees” and “Notes From the Underbelly.”
The arrangement rewrites the standard industry exchange that dictates the studio retains only revenue from electronic sell-through platforms like Apple’s iTunes while the network gets only rights and revenue from streaming ad-supported episodes. ABC and WBTV practically created that TV-industry template last year with its deal for “The Nine” (HR 9/13).
The two-year deal still allows ABC to keep streaming ad revenue from the four series from the coming season. Studios typically don’t get a taste of ad revenue until series reach the syndication window.
Negotiations were led by Jana Winograde, executive vp business affairs at ABC Entertainment, and Craig Hunegs, executive vp business management at WBTVG.
The deal is less reflective of a cross-ownership face-off between a network and a studio and more two entertainment companies with stakes in both of those businesses and a shared willingness to help each other figure out the digital future.
“I think what Jana and her team artfully constructed was a deal that met not only the needs of Warner Bros. but what consumers needed,” Disney-ABC Television Group president Anne Sweeney said. “The beauty of this deal is they put the consumer first.”
Said WBTV president Bruce Rosenblum: “What’s fun and exciting for each of us as this marketplace evolves rapidly is that the deals we made 12 or 24 months ago are different than the ones we do today. It’s an experimental time.”
The deal represents another diminution of the four-year exclusivity period studios once granted programming they licensed to the networks. In recent years, that exclusivity has shrunk due in large part to WBTV deals including allotting early windows to DVD boxed sets of “Friends” and last year’s deal with ABC for the series “The Nine” that gave the studio EST rights. ABC and WBTV also have led the industry to extend their exclusivity to six-year spans.
As with those past deals, ABC and WBTV are looking to set precedent again here, though most digital deals for the coming season, which replicate last year’s template, are already complete. However, ABC has not yet reached a deal with 20th Century Fox for “Women’s Murder Club.”
“In success on this year’s shows, we’ll have a chance to re-address those relationships,” Hunegs said of the other one-year deals. “If, say, (the new series) ‘Chuck’ continues beyond next year on NBC, it’s a whole new conversation.”
The deal is not exactly a ringing endorsement in the EST business, which already was rocked last week by Apple’s removal of NBC Universal programming from iTunes as a result of stalled negotiations between the two parties. That said, sources say the ABC-WBTV deal was headed to its current incarnation well before the NBC-Apple fracas.
By ceding second-year revenue, ABC could be calculating that there won’t be significant viewership for repeat viewings online. That said, ads WBTV sells for repeats can’t be based on individual ABC series, only “run of site” sales that cover an entire dot-com.
Another question mark pertains as to where exactly digital repeats will be made available online. ABC could extend its broadband player beyond in-season programming, but the new deals also present the likelihood that WBTV will launch its own online distribution channels where repeats can be viewed.
WBTV’s EST rights don’t guarantee that all of the studio’s programs will even make it to iTunes. ABC’s agreement with its affiliates allow a limited number of series to be available for download, which means the network could keep a WBTV series off that platform. But of those series that make it to EST, WBTV has a lock on that revenue. n