ABC's AOL Pact Marks

From the WSJ:

Walt Disney Co.'s ABC became the latest major network to strike a deal
with AOL allowing its full-length prime-time shows to be available
free on the Time Warner Inc.-owned portal.

ABC shows will be available on AOL starting today, a few weeks before
NBC Universal and News Corp.'s Fox are expected to launch their
jointly owned online venture Hulu, which will make NBC and Fox
programs available on several major Web portals including AOL. CBS
shows are already available on AOL. CBS is a unit of CBS Corp.; NBC is
a unit of General Electric Co.

ABC's deal highlights how the online strategy of the major TV networks
has evolved over the past 18 months, reflecting rapid growth in the
number of people watching online video and increasing advertiser
interest. In May of last year, ABC became the first of the major
networks to offer its most popular shows in full and free on the Web.
Most of the other networks followed.

Initially the networks' focus was to stream shows on their own Web
sites, but media companies have changed tack this year, striking deals
with major portals to ensure that as broad an audience as possible
sees the show. Hulu, for instance, will allow viewers to watch NBC and
Fox shows on AOL, Microsoft Corp.'s MSN, News Corp.'s MySpace and
Yahoo Inc. Hulu is expected to start offering programs in October,
although a precise date hasn't been announced. NBC yesterday announced
an additional online service for its TV shows called NBC Direct,
enabling viewers to download ad-supported episodes free from NBC.com.

ABC's agreement goes into effect days before the networks' fall season
kicks off, ensuring ABC fans will be able to watch some of the
network's new shows, such as "Pushing Daisies," as well as older shows
such as "Grey's Anatomy." The shows will be available one day after
they air on broadcast television, and approximately four episodes of
every show will be available for viewing at one time.

ABC and AOL will share revenue from the arrangement under terms
neither company would discuss.

Anne Sweeney, president of the Disney-ABC Television Group, said the
deal with AOL marks a new phase in the network's digital strategy:
opening up ABC programming to as large an audience as possible, but in
a way that would protect the network's shows from piracy and appeal to
both advertisers and affiliates.

As part of the deal, ABC will use "geo-targeting" to embed one local
ad appropriate for each viewer alongside three national ads in each
hour of programming. The deal is a welcome one for affiliates, which
have feared being on the losing end as networks move their content
online.

"The single most significant impediment to stations being able to take
good advantage of this opportunity has been the inability to target
the viewing that occurs in their markets," said Ray Cole, chairman of
the ABC Television Affiliates Association.