FOX, AFFILS NEAR DEAL FOR VOD REVENUE SHARING

The Fox network and its affiliates are close to an agreement that would clear the way for Fox to enter the potentially lucrative video-on-demand market—that is, to sell individual programs via the Internet and other platforms—as ABC, CBS and NBC have already done, according to sources close to the negotiations.

Right now, Fox is effectively barred from the VOD market by terms of its existing National Football League agreement with its affiliates. Under the agreement, the affiliates contribute $15 million toward Fox rights contract with the NFL. But the agreement also heaps restrictions on when and how Fox can “repurpose” its programs for VOD. That agreement is set to expire this June.

In the negotiations over the renewal of the NFL deal, the affiliates are willing to waive the VOD restrictions, if Fox guarantees them a percentage of the VOD take, the sources say.

Brian Brady, the head of the Fox affiliate board, declined comment beyond saying that the talks have been “positive” and that he was “confident” they would yield an agreement. He declined to speculate on when.

Fox Network chief Tony Vinciquerra told TVNewsCheck that revenue sharing is on the table and that the talks have been fruitful.

Gary Chapman, president and CEO of LIN Television, owner of stations affiliated with each of the Big Four broadcast networks, said the station group is interested in all the networks’ VOD initiatives. “We want to be a partner and we want to participate.”

VOD discussions between ABC, CBS and their affiliates have gone far beyond revenue sharing. Some ABC and CBS affiliates are interested in becoming local marketing agents for the VOD distribution of shows over the Internet. They would promote and sell downloads within their coverage areas over their own Web sites.

But in the case of Fox, Chapman said, the affiliates are only interested in “a piece” of the revenue.