AOL Bulks Up Video, Discover Sponsors

Video may be the hottest content format online these days, but are people ready for long form (that is really long form) Web video? AOL is betting on it. The company’s latest move in its quest to conquer the online video space is a series of partnerships with movie production firms to distribute paid feature film downloads. Paid and ad-supported TV offerings through new relationships with Sony Pictures and Fox TV are in the works, too. And, in conjunction with AOL Video’s official move out of beta Tuesday, Discover Card has bought out all display ad inventory in the video portal.

AOL aims to become an online hub both for viewing Web video on its site as well as seeking out video for viewing on other sites. “Consumers are looking for a single source to find out about video… It’s a very fragmented experience today,” observed AOL Video VP Fred McIntyre. “Our goal is to help solve that problem.” McIntyre added the company will be marketing its video offerings more heavily, so an increase in the portal’s video downloads, including ad-supported video downloads, is expected.

To kick off AOL’s official video portal launch, Discover Card will sponsor the site section through display ads till the end of September. “A big part of the affinity [with Discover] is they were doing big things with the brand and thought they’d put their new stuff with our new stuff,” explained McIntyre.

Sony Pictures Home Entertainment, 20th Century Fox, NBC Universal, and Warner Bros. will be making new and old flicks available for paid download at prices between $9.99 and $19.99 each. The films can be viewed on PCs, Windows Media-enabled portable devices, or offline once downloaded. Sony movies can be purchased today, and those from the other studio partners will follow in coming weeks.

“This natural progression from the clips type of programming where everything started a few years ago, to television where it’s at today, to movies is kind of a logical progression,” concluded McIntyre.

Most people who download the company’s films watch them on their PCs, said Benjamin Feingold, president of Sony Pictures home entertainment, digital distribution and acquisitions. “We believe the significant event will be the un-tethering of the PC…. We think that’ll make [digital distribution] more promising,” he suggested. Sony Pictures feature films are already available for digital download through Cinemanow, Movielink and Guba, according to Feingold.

Although full feature movie downloads are not typically available for free through legal channels yet, Feingold anticipates an extension of the ad-supported TV broadcast and cable movie model to the Internet in the future. “We do foresee that ad revenue will support movie viewing…similar to the way that the business is windowed related to broadcast and cable,” he commented.

In this, it’s first move into TV programming distribution via the Web, Sony Pictures is fueling two new ad-supported AOL Video channels. The action-themed channel with the license-plate inspired name, AXN, will offer up fast-paced dramas like “Charlie’s Angels” and “Starsky & Hutch.” The FunnyBone channel will serve up — you guessed it — sitcoms, such as “News Radio.” More channels featuring Sony programs are planned for upcoming months.

AOL offers pre-roll and mid-roll ads as well as banners running alongside the video player.

In future weeks, the AOL portal will add five new channels providing paid Fox Entertainment Group content, including a channel offering current Fox shows, another featuring older shows like “Buffy the Vampire Slayer,” and others with programming from Fox’s FX Network, Speed and action sports channel Fuel TV.
AOL launched its video portal in beta in July with over 45 video channels from content partners including A&E Television Networks’s A&E Network and The History Channel, MTV Networks’s Comedy Central and Nickelodeon, TV Guide and Warner Bros. Entertainment. In addition, the company in March launched its In2TV ad-supported broadband video site featuring Warner Bros. Entertainment content.

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