General

The Online Video Jukebox

One content deal at a time, video content is being made available over the Internet, and some ISPs are already starting to cash in.

by Gerry Blackwell [July 22, 2004]

Drew Bouldon has a bold vision for the future of IP-based video entertainment.

It involves his company, Atlanta-based ISP EarthLink, providing online access to huge archives of movies and TV shows, probably stored in highly compressed MPEG4 format. It wouldn't be the current mainstream titles, but less in-demand material.

Say you have a sudden hankering to watch the pilot episode of Bewitched, the hit 1960s TV sitcom, Bouldon suggests. You'd surf to a content provider partner's site through an EarthLink portal and start streaming or downloading.

EarthLink and its partners would deliver the content on demand over your broadband Internet connection. For a price, of course. Don't count on Bouldon, EarthLink's senior product manager for entertainment, turning his vision into reality overnight, though, or even very soon.

"That kind of market is several years away," he admits. "Video on demand is just now starting to hit critical mass on the cable TV side. But it's an area we're studying."

Sports now
In the meantime, Bouldon and EarthLink are more than happy to take smaller steps, like working with Buffalo, NY-based content aggregator Synacor to put together the $9.95-a-month EarthLink Premium Sports package—only some of which is video. The company started offering the service to subscribers in March.

Premium Sports features content and services from several providers including Major League Baseball (MLB), the National Hockey League (NHL) and NASCAR, the stock car racing circuit.

There is some strong video content—NHL Highlight Machine, for example, plus highlights and other short video clips from NASCAR and MLB. But the bundle also includes streaming audio play-by-play of every MLB game, text and graphics content from Motor Trends, and some innovative interactive features that could only be offered over the Internet.

PitCommand, for example, delivers real-time, GPS-based telemetry on all cars in NASCAR races. EarthLink Premium Sports also includes popular online fantasy baseball and football activities from SportingNews. They let subscribers choose their own teams from major league rosters, make trades, track team results and compete for cash prizes against other online fantasy team managers.

Subscribers can get most of the content included in the EarthLink bundle directly from the content providers, but it would cost over $40 a month to subscribe to all of it as separate stand-alone products.

It's a good deal for subscribers, but it's also a good deal for content providers, says Synacor president and CEO Ron Frankel. NASCAR, for example, gets a cut of revenues from subscribers who buy the EarthLink bundle for the baseball and hockey features—not very much perhaps, but more than the zero it would get from those subscribers otherwise.

EarthLink's over five million subscribers open up a vast new audience for the content providers beyond their hardcore fans—which is why they're willing to discount wholesale rates to make possible a bundle like Premium Sports.

"There is also a systemic advantage in having the ISP take care of the billing and customer support, which are a large part of the cost to content providers of offering the stand-alone services," Frankel points out.

EarthLink and Synacor won't provide much detail on business arrangements among the players involved in the Premium Sports deal—EarthLink itself, Synacor, and the content providers. It's a "shared risk environment" in which "everybody is compensated relative to the value of their contribution," is all Bouldon will say.

Go to page two: Intricate deal making >