ABCNews.com Video Goes Premium

Continuing efforts by media giants to better monetize their Internet investments, ABCNews.com will abandon free, ad-sponsored video and begin charging users who wish to view broadcast clips on its site.

Beginning this week, all video content from ABC News, a unit of the Walt Disney Co. will be available only to users who cough up $4.95 per month for “ABCNews On Demand”. RealNetworks is providing the technology behind the streams.

ABCNEWS on Demand will include live breaking news, as well as time-delayed video from shows such as “Nightline,” “Good Morning America” and “World News Tonight With Peter Jennings.” Users also have the option of paying $3.95 for on-demand viewing of archived “Nightline” shows.

To sweeten the deal for ABCNews.com users, who previously had free access to shorter, narrowband-quality clips, the network said it would begin offering full-length, broadband-quality editions of its shows and access to 30-day archives.

“The thinking was we wanted to be able to provide Internet users with really high-quality content from ABCNews, including the full programs of ‘Nightline’ and ‘World News Tonight,’ segments from ‘Good Morning America,’ and the ‘Nightline’ archives,” said Bernard Gershon, senior vice president and general manager at ABCNews.com. “We wanted to provide that at high bandwidth, 300k and above, and in order to do that and cover streaming costs … we needed some way to pay for it.”

Despite the thinking of many that streaming ads would be an easy sell to advertisers already buying TV commercials, Gershon said ABCNews.com had been successful in selling only a “very few” streaming video ads in the site’s free version.

But the company hasn’t ruled out advertising entirely. In addition to charging a fee for access, Gershon added that ABCNews.com is experimenting with continuing to place ads in the streams, though currently the company is limiting the amount of advertising it requires subscribers to watch, he said.

The launch hasn’t been without some gaffes, however. Since earlier this year, ABCNews.com had been providing free streams to BellSouth’s ISP landing page — streams that now result in broken links or lead back to ABCNews.com On Demand’s page.

ABCNews had given some indication that it was looking to rethink its strategy of rebroadcasting online as early as February, when it ceased providing free streams to Web portal Yahoo . Sources at the company said the cost of providing broadband streams — which rose as the number of broadband users increased — had proved unsustainable.

“It’s continuing that strategy to provide Internet consumers with the best journalism that ABC News produces … and to extend the ABCNews brand online, and also develop two streams of revenue,” Gershon said.

The launch of ABCNEWS on Demand also follows moves by other media conglomerates, including AOL Time Warner , to introduce fees to cover the cost of streaming video. In March, AOL’s CNN.com began offering “CNN NewsPass” monthly subscriptions.

Like CNN, and News Corp.’s FoxSports.com, ABCNews.com continues making content available through Seattle-based RealNetworks’ RealOne SuperPass service, which charges $9.95 a month for access to streams provided by partner networks. ABCNews.com has been offering broadband-quality streams through the service since October — the success of which Gershon said encouraged the company to begin charging for all its video.

“ABCNews content on RealOne SuperPass has been very well received,” he said. “We found that consumers are viewing the content on average from 10 to 11 minutes, and we saw a growth in number of broadband users accessing content. We’ve seen that they actually watch it for a fair amount of time. RealOne has actually been key in our decision, in that [RealNetworks] has grown their subscription business to well over 700,000 subscribers.”

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