Programming syndicators have begun talking about bringing first-run content to cable’s on-demand platform, and at least one operator will be ready to listen at the NATPE convention this week. By Simon Applebaum Tim Voit predicts cable’s video-on-demand platform will reach the next stage in its evolution by the end of this week. "In fact," says Litton Entertainment’s EVP with a hint of bravado, "I’ll guarantee it." Litton syndicates programming to broadcast stations; on his roster are shows with personalities Tom Joyner and Jack Hanna, and news featurettes produced with BusinessWeek, Consumer Reports and Good Housekeeping magazines. At the NATPE convention this week in Las Vegas, Litton says he will complete an agreement with a cable operator that will make some of his original news featurettes available on VOD the same day, or shortly after, those segments premiere on broadcast. Before press time, Litton declined to name the cable operator, although he was openly enthusiastic about the value of first-run syndicated programming to cable’s VOD platform. "A brand like Consumer Reports makes a good VOD programming category for cable," Voit says. "Brands like that draw people who love that kind of content to cable for VOD, and we get a new distribution avenue in return." A couple of delicate issues need to be resolved before shows like Buena Vista Television’s Who Wants to Be a Millionaire come to VOD, namely, deciding on a revenue model on the operators’ side, and protecting relationships with broadcast stations, on the syndicators’ side. Comcast Hits NATPE Litton is not the only syndication exec walking the aisles at the Las Vegas programming market in pursuit of VOD deals. At least two other program syndication companies—Program Partners and AIM/American Latino TV—acknowledge they are conversing with cable operators about a VOD window for first-run broadcast shows. Even syndication leaders like King World and the 20th Television unit of News Corp. hint the day may come when Comcast, Time Warner Cable, Cox and other MSOs will provide their customers with episodes of Wheel of Fortune, Oprah, Judge Judy and Martha on VOD, soon after broadcast stations air them. "We’re having internal discussions on this," says King World chief spokesperson Arthur Sando. "All this stuff is in play, [although] it’s too sensitive an issue to discuss in public," adds a 20th Television spokesperson. Comcast programming executives will be a visible presence at NATPE. "If anyone wants to talk about VOD there, we’ll be happy to talk," says Page Thompson, VP/GM of Comcast On Demand, which had some 1.4 billion views last year among more than 8 million digital/VOD households nationwide, compared with 500 million views in 2004. Surging view rates at Comcast, Time Warner and other operators, along with growing interest among advertisers to buy VOD campaigns, are encouraging some programming syndicators to aggressively court cable. It’s all about brand expansion, says Robert Rose, CEO of AIM/American Latino TV, which has made a deal with S�TV to run episodes of American Latino TV and Urban Latino after their broadcast airings. "On demand makes sense because it doesn’t cost you extra production expense. The show is done," Rose says. "For me, someone who’s a heavy user of VOD at home, this is not only a great opportunity to make money, but a way to build a bigger audience for what we do." For Cox programming SVP Bob Wilson, VOD is reaching critical mass and first-run syndication attractions such as Warner Bros.’ Extra or King World’s upcoming talk show with Food Network star Rachael Ray are must-haves to build momentum for the platform. "We want to be the ones that satisfy consumer demand, with all the forms of competition out there," he says. "The business case for stepping [into first-run syndication] is that we all want ways to earn every return on investment we can on the platform and plant we built. This is one way." Pay or Free? Wilson is contemplating what the revenue model would be for first-run syndicated content on VOD. Specifically, he’s deciding whether to rely on a paid model such as the one Comcast is using for its trial of CSI, Survivor and other CBS favorites, or to offer syndicated shows for free with advertising. "Our challenge is to find that model," Wilson says. "We’ve got to be very understanding of the price threshold customers seem to be bumping up against. Do we get more revenue from a subscriber charge than we can from ads on free VOD? Everybody’s trying to work this out." Thompson is unequivocal about the model Comcast would use for syndicated content. Notwithstanding the CBS trial, free VOD with ad support is the way to go. "What needs to develop is more advertisers coming in so that programmers become confident about getting incremental revenue from their content," Thompson says. With General Motors, Kimberly-Clark, Procter & Gamble and other blue-chip sponsors pushing more money into VOD development, syndicators will be cutting deals with advertisers just for VOD runs, Thompson suggests. Meanwhile, programming syndicators must take care not to alienate their broadcast affiliates, which are worried that VOD would cut into their audience, particularly if daytime syndication hits run on VOD the night of or the day after their initial broadcast airing, Rose says. "We have to protect that relationship first," says Josh Raphaelson, principal of Program Partners, a Los Angeles-based syndicator offering Da Vinci’s Inquest, the popular Canadian forensics procedural that appears on Superstation WGN and other stations. "It’s a thorny issue. Our attitude now is to look at VOD as a promotional medium [rather] than a profit center. We’re looking at the idea of offering sample episodes [of Da Vinci] and other shows on VOD to promote the run on stations and WGN." At AIM, the game plan now is to produce specials with a built-in VOD window. The guinea pig is American Latino Presents, three one-hour specials that would air on broadcast first, then S�TV or another cable network, then VOD. Rose anticipates running the first special this spring, with each special running on VOD six to 12 months after the broadcast window. How soon VOD becomes a serious outlet for syndicators depends on the terms of the deals, says Gary Lico, CEO of CableReady, the programming agency that sold Inside the Actor’s Studio to Bravo and Forensic Files to Court TV. "If Comcast or someone else guarantees a syndicator any revenue shortfall will be made up, that will get the attention of key producers," Lico says. Comcast’s Thompson is reluctant to predict when syndicators will commit to VOD windows. But the impetus to make such deals is there. "A few years ago, we wouldn’t have this conversation at all," he says.

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