ABC Crafts Digital Rights Deal for 'Lost' Mobisodes

First Union Agreement Over Content Delivered to Third Screen

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NEW YORK (AdAge.com) -- Walt Disney Co.'s ABC TV Network sent another signal that it's ready to embrace digital media delivery yesterday when it announced a rights agreement with the various Hollywood guilds for mobisodes inspired by ABC's hit program "Lost" and designed for initial release on mobile platforms.
When ABC announced its plan to make its prime-time programming available for sale through iTunes, the various Hollywood labor unions cried foul, claiming ABC wasn't handling the residuals fairly.
When ABC announced its plan to make its prime-time programming available for sale through iTunes, the various Hollywood labor unions cried foul, claiming ABC wasn't handling the residuals fairly.

It's the first union agreement to cover content to be delivered to the very small screen and could prove to be an important benchmark as other content creators extend their hit shows onto digital platforms.

Hollywood guilds
The unions involved included Writers Guild of America, west, the Screen Actors Guild and the Directors Guild of America. Screen Actors Guild officials met with cast members in Hawaii, where the TV show is shot, late last year to garner support for the negotiation talks.

The agreement covers mobisodes -- original mini-episodes that are no more than five minutes in length and used on cellphones. The agreement calls for a residual formula once a mobisode has been in place for 13 weeks and that formula differs depending on whether the mobisode is consumer- or ad-supported. Use on ABC.com with neither of those revenue sources does not trigger a residual.

Negotiations with Hollywood unions just might prove to be one of the biggest hurdles for TV networks as they move toward more digital delivery options. When ABC announced its plan to make its prime-time programming available for sale through iTunes, the various Hollywood labor unions cried foul, claiming ABC wasn't handling the residuals fairly. Most of the industry contracts expire in 2007 and 2008.

Deals with TV affiliates
The other major hurdle, observing the delivery rights of local TV stations, is beginning to sort itself out. Last week, just in time for the National Association of Broadcasters marketing conference in New York, Fox announced a deal with its affiliates that would share revenue from Internet-delivered programs, essentially allowing the network to fast track more digital deals. And NBC last week announced a joint venture with its affiliates that will look at ways to monetize their collective video inventory on digital delivery platforms.
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