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July 2, 2006

Major Moves to Online Content--But How Will Congress' Upcoming Decision Affect Convergence Culture?

Moving into a major holiday four-day weekend, there were a lot of major announcements and events in the industry at the end of last week that affect old media companies moving their content online.

For instance, CBS announced a deal with its affiliates to help gain further network-wide support for a drive to new media content related to CBS programming. According to Michele Greppi of Television Week, the deal resembles FOX's agreement with its affiliates, in which stations receive 12.5 percent of what the network receives, after deducting various expenses, for on-demand repurposing of already-aired content and 25 percent of any content being available online before it airs on television.

CBS's deal will allow those stations who promote digital content on broadcasts to share in the revenue that results from the on-demand Web content. The affiliates are also slated to receive a fee for generating hits on CBS-owned Web sites with content supported by advertising revenues.

Meanwhile, also in the Viacom family, MTV Networks has added substantial content to its iTunes offerings. MTV's show Viva La Bam, Nick at Nite's show Fatherhood, TV Land's show Sit Down Comedy with David Steinberg, Logo's Noah's Arc, and The N's Beyond the Break will all be available for $1.99 per episode, in addition to a free download of the inaugural episode of Blade: The Series, from Spike TV, offered until July 11.

Finally, also on Thursday, Google announced that its video service will now allow users to rate clips, as Google tries to continue competing with the immensely popular YouTube in the video sharing market.

But all this news of content moving online comes amidst growing fear that content providers will lose the battle on Capitol Hill with Internet service providers over what has been labeled "net neutrality," which I've written about in the past. The Senate Commerce Committee rejected the addition of a "net neutrality" clause to the current legislation aimed at easing restrictions for telephone companies to get involved in pay television...As usual, it's hard to figure out how the one thing has to do with the other when it comes to bills being put together.

Regardless, net neutrality (as is currently in place, for the most part) has already been rejected by the House and is now on the Senate floor. Online content providers and "Internet equality" types are all protesting and organizing lobbying efforts to get net neutrality onto the agenda for the bill to pass.

The debate right now is, one the one side, that net neutrality is essential to allow everyone equal access to Internet content, and, on the other side, that service providers need to be able to get extra compensation for expenses required in updating lines for increased video content, etc., and that they should be able to work out deals and charge sites for preferential treatment.

Just as we have a strong movement toward equal access online, these proposals to eliminate net neutrality--along with moves toward online gated content--damages the ability of consumers to find products. And any move that ultimately takes power away from consumers is, to me, detrimental to convergence culture.

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