As Cynthia notes, content rights issues remain one of the key stumbling blocks in media’s migration to online distribution. A Newsweek story by Johnnie Roberts cites a few examples of the problems involved and some new models being considered:
Consider the latest idea from the business suite at Warner Music Group, which is rummaging like the rest of the industry for new sources of revenue: when search engines like Google formally launch their new video-search sites, Warner Music wants a cut of the cash the sites would reap from selling ads next to search results. So if you type in “Madonna”—a Warner act—at the Google Video site (now in its test phase), and the results are accompanied by ads, Warner wants a share of those ad dollars as well as payment for any Madonna videos that are streamed or sold, according to a senior Warner insider who wasn’t authorized to speak on the record, adding that the label has approached Google about the idea.
Roberts also discusses the growing friction between record labels and Apple, which “now sells 80 percent of all downloaded songs [with] labels get[ting] 60 to 70 cents of each 99 cent iTunes download.”
…labels have started agitating for a more creative approach to pricing, in which new releases would cost more than 99 cents, oldies as little as 60 cents and recent hits somewhere in between. Jobs disagrees and publicly labeled the industry “greedy” last month, arguing that it’s pushing for price hikes in a still-developing market. Record executives expressed shock, noting his dominance in the MP3-player business. The dispute has gone beyond name-calling. Two major labels, SonyBMG and Warner Music, have refused to license their music for iTunes in Japan. The stakes are much higher in the United States, where the two parties have to negotiate a new license by next year.
Roberts also cites a dust-up, since resolved, between Universal Music and Yahoo:
Early this year [Universal Music CEO Doug] Morris noticed his grandson repeatedly watching a video of 50 Cent, a Universal artist, for free. Morris investigated and discovered his labels were supplying the videos free of charge to promote record sales. Yet Yahoo, AOL and other sites were awash in ad revenue because of the huge audiences the videos helped draw…Morris demanded payments—a fee for each time a Universal Music video was played and a cut of the ad money. Yahoo balked, and Morris pulled Universal’s videos. After weeks of declining traffic, Yahoo capitulated. One Universal Music exec estimates revenue from the new agreement to be worth $10 million or more to the company. Warner Music is now trying to extend the concept to the emerging video-search business.
In her TV Week piece, Daisy Whitney notes that there has been some progress in clearing video rights for short term online distribution of TV programs for promotional purposes, including selected content from UPN, The WB, Bravo and SoapNet available via Google, AOL and Yahoo. But she also points out that its a big step to go beyond these limited applications to broader distribution deals.
When an Internet portal wants to provide video on its site, as AOL has done over the past 18 months, the biggest concern is ensuring the content has been cleared with various guilds for actors, directors and writers and that the music has been cleared too, said Patricia Karpas, VP and general manager for TV ventures at AOL. Those rights are easier to obtain if content is offered promotionally, as The WB’s “Jack & Bobby” was last year on AOL. That’s why networks have used the Internet largely as a promotional venue for shows rather than a revenue generator. “If Google or AOL or Yahoo were to put ‘Everybody Hates Chris’ on for the year and make it available, it would be a totally different story,” Ms. Karpas said. “Then you are looking at Google as almost another window for the content.” In that situation, rights issues get more complicated.
A story in MediaWeek indicates that program rights issues has delayed the launch of online distribution by the UK’s Channel 4:
Channel 4 has been forced to delay the launch of the broadband simulcasting of its main channel, scheduled to start this month, because of conflict over programme rights issues. C4 had been planning to launch its service on broadband—the first broadcaster to screen its content, as seen on TV, via the internet—in October, with future plans for E4 and More4 to follow. However, the broadcaster is understood to have run into a major conflict with production companies over who owns the rights for individual shows. Most of C4’s shows are produced by independent companies, which are keen to exploit the potential benefits of broadband. Andy Barnes, C4’s sales director, said that exploiting broadband content commercially is posing a major headache. “It’s a huge issue,”
Mitch Shapiro at 1:52 PM|Comments(0)
Blogs We Read
