Bloomberg News

News Corp.'s Fox Shares Web Sales With TV Affiliates (Update4)

March 01, 2007

News Corp. (NWSA:US)'s Fox television network agreed to share revenue from online advertising and downloads of TV programs with its affiliate stations, addressing their concerns over a loss of viewers to the Internet.

The agreement with stations not owned by Fox expands distribution of the network's programs to Web sites of 200 affiliates, Los Angeles-based Fox Broadcasting Co. said today in a statement.

Fox will get 70 percent of the advertising sold online and affiliates the rest. The stations are concerned about losing viewers as the network makes shows available on its Web sites and on portable devices such as the iPod. The Fox.com site will include a ZIP code screen that sends viewers to local station Web sites where they can watch or buy shows including ``24'' and ``Prison Break,'' the network also said.

``That would appear to be a fair agreement,'' said David Joyce, an analyst at Miller Tabak & Co. in New York. ``If affiliates are going to lose immediate viewers, and therefore ad revenue, to those watching DVRs or streaming online, they need to replace that ad revenue somehow.''

Class A shares (2FA:US) of News Corp. (NWS:US) fell 32 cents to $22.21 at 4:02 p.m. in New York Stock Exchange composite trading. They have gained 3.4 percent this year.

The network in November started Fox on Demand, an online service showing episodes of series including ``Prison Break'' and ``24'' on MySpace.com and on the Web sites of the 24 Fox stations it owns.

Today's agreement affiliates not owned by the company is ``a natural extension to provide a digital strategy for our local stations,'' said Ron Berryman, general manager of Fox Interactive Media's stations group.

Fox on Demand currently offers free, ad-supported streaming of TV shows. With the agreement, viewers will be able to purchase individual programs. Prices weren't given.

``We're still testing the model,'' Berryman said. So far, ``Fox on Demand is doing very well for us,'' he said, without providing details.

To contact the reporter on this story: Cecile Daurat in New York at cdaurat@bloomberg.net

To contact the editor responsible for this story: Emma Moody at emoody@bloomberg.net.


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  • NWSA
    (News Corp)
    • $18.29 USD
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    • 0.98%
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