Will "F Troop" be the killer app for America Online?
Nearly five years after the merger, AOL has finally started to fulfill the long promised content play with Time Warner. Through a new channel launched today called In2TV, AOL has aligned with corporate sibling Warner Bros. to offer thousands of full-length TV episodes from the Warner Bros.' library of shows such as "Falcon Crest" and "Chico and the Man." Except for a few episodes presented sporadically, it is the first time long-form programming has been offered online.
The initiative, free to both subscribers and non-subscribers, could provide a nice revenue stream from advertisers starved for broadband inventory online. It could also give AOL the means to demonstrate to potential acquirers that it is a content-rich portal and premiere destination for video on the Web. In2TV gives AOL an attribute it was missing and something it should have been doing better than any other portal considering its Time Warner sibling properties-a constant conduit of content.
But the question is whether it will make AOL a stronger magnet for media buyers and a more attractive acquisition target. David Card, VP-research director at Jupiter Research, thinks it could-"if it's successful," he said. "It's an interesting experiment."
Warner Bros. is presenting more than 4,800 episodes from 100 different TV series. The programs range from "Welcome Back, Kotter" and "Wonder Woman" to the more recent "La Femme Nikita." Warner Bros. has cleared more than 14,000 episodes from 300 series for future distribution on In2TV.
The shows are categorized in six different channels: LOL, Dramarama, Toontopia, Heroes and Horror, Rush and Vintage. Each channel offers interactive features.
AOL is mum on which specific advertisers have inked deals, but said it is heavy on consumer package-goods marketers. Mr. Conroy said no more than two minutes of video ads will run during each episode.
The portal's broadband play contradicts one of the Internet's most commonly held theories: consumers want small bites.
AOL contends that online video watchers say they prefer short-form programming only because that's what comprises most of the streaming TV inventory. Offering programming at scale will spur on the market for longer-form online viewing, the portal contends. "Somebody's got to go first and have the guts to try something to build the market," said Kevin Conroy, exec VP, AOL media networks. "Putting one show or a series or two out there is not the way to build the market."
Mr. Card of Jupiter is cautiously optimistic. "I'm not hugely excited about the long-form content delivered to a PC," he said. The quality of video is lower on a PC, and if many users do their broadband viewing at work, it's not likely that they will be willing to surreptitiously watch an entire TV show there. Plus, he said, there's no guarantee that the AOL audience of mostly women and children will be attracted to old TV programs.
AOL's target market is broad-men and women 25 to 49, with the heaviest users of AOL Instant Messenger ranging in age from 18 to 34. The portal claims millions of college kids, who have only PCs in their dorm rooms, will be early adopters, but had no solid numbers to back up that claim. Warner Bros. will cull historical ratings data on the shows to help AOL.com's sales team figure out which demographics particular programs attract.
For Warner Bros, In2TV offers a post-syndication distribution window-a way to make money from shows that are otherwise collecting dust on the library shelves. "This gives us the opportunity to co-invent a whole new distribution platform," said Eric Frankel, president of Warner Bros. domestic cable distribution. Both classic and recent programs tend to cycle through the TV landscape, either in syndication or as off-network acquisitions by cable channels. "You get a hit show, it plays for a year, it plays for six years," said Mr. Frankel. "Now we have a place for it after that."
Makes so much sense, one wonders what took them so long. Mr. Frankel said Warner Bros. had met with "all the portals" over the last couple of years, but said, "AOL jumped the highest and was the loudest about getting it."