AP, Microsoft Team on Video News Feeds

In a boost for its efforts to have a hand in the online video revolution, Microsoft announced that its MSN portal would partner with The Associated Press (AP) to develop an advertising-supported online video news network.

The AP Online Video Network will be used to provide members who receive news updates from the wire service with direct news video clips sent to their Web site, where they will be ready for viewing using the MSN Video Player. The service is expected to be up and running by early in 2006 and will be free to members of AP.

Web sites that are members of the AP network, which include some 3,500 newspapers and broadcast outlets, will receive a custom-branded MSN Video player, daily news video from AP, streaming video advertising to run along with the video and will share in the advertising revenue generated along with MSN and the AP.

“This partnership will empower AP members to compete in an emerging segment of Web content,” said Tom Curley, president and CEO of the AP. “The expertise MSN brings in online video technology will be a key factor in the success of the network.”

MSN Director of Advertising and Business Strategy Todd Herman said the network helps MSN provide its advertisers with far greater exposure, helping them to “better reach the huge audience of people who now turn primarily to the Internet for their information.”

At its launch, the network will include about 50 video clips daily covering national, international, entertainment, technology and business news. Over time, that number is expected to grow as members of the AP network and others contribute their own content into the feeds.

Behind the Scenes

The news clips will be about one-minute in length and be preceded by a 15 or 30 second commercial.

Specific financial terms of the deal were not disclosed, but the companies said that AP member Web sites will be paid based on how often Web visitors accessed the content through their site. Microsoft said it has seen advertising revenues quadruple since launching MSN Video — which serves video and ads to sites affiliated with the MSN portal sites — in January of 2004.

In addition to providing its video player, which runs on the Windows Media platform, MSN will support the network with behind-the-scenes technology, including a local advertising and content syndication system for AP affiliates within the network.

The deal with AP marks the first time MSN video will be fed outside of the MSN network. Microsoft emphasized that MSNBC — its joint venture Web site with NBC — will continue to be the main news provider to the MSN network of sites.

News industry analysts said the deal was also important to help the Associated Press maintain its relevance in the new media landscape, where millions use the Internet as the main source of their news — bypassing newspapers, which have long been the bread-and-butter of the news service’s revenue base, and even traditional electronic media outlets.

Other news agencies, including Reuters, are already in the online video market, some providing feeds to third party sites and others offering direct downloads for consumers.

Not Alone

Smaller newspapers that are already members of AP will benefit as well by gaining the ability to provide video clips on their Web pages, analysts noted.

The MSN-AP deal came as America Online was also announcing a partnership with CBSnews.com to feed content and video to AOL.com.

Enderle Group principal analyst Rob Enderle said the convergence on the same ground by major content owners and others is not surprising, given that many believe that streaming video advertising has the power to eclipse even the paid search listings business that gave rise to Google.

While most observers expect a highly personalized version of Web video to emerge, that will take time. “What you’re seeing now is the groundwork being laid and everyone trying to stake out their share of the emerging turf,” Enderle said.