TELECOM Digest OnLine - Sorted: AOL Video Service to Debut With Intel, Kraft Ads

AOL Video Service to Debut With Intel, Kraft Ads

Kenneth Li (
Wed, 15 Mar 2006 12:51:06 -0600

By Kenneth Li

AOL said it plans to launch on Wednesday one of the biggest free video
services on the Internet, serving up vintage shows and short clips
backed by online advertisements.

The service, called In2TV, will launch with four advertisers -- Intel
Corp., Kia Motors Corp., Kraft Foods Inc., and Hershey Co.

"It's from the strength of the online advertising market that we can
bring free on demand (videos)," Kevin Conroy, executive vice president
of AOL Media Networks said in an interview.

In2TV will feature thousands of shows from corporate sibling Warner
Bros., which owns the rights to shows that include "Welcome Back
Kotter," "Kung Fu" and "Growing Pains."

AOL, the online division of Time Warner Inc., is gearing up to take on
Microsoft Corp., Google Inc., Yahoo Inc. and Apple Computer Inc.,
which have their own designs on digital entertainment.

AOL now sees video as a linchpin to the company's turnaround after its
online presentation of the Live 8 global concerts last year were
watched by more viewers than those on TV.

Free videos will make up the bulk of its growth, Conroy said. "The
real volume of activity is in the free streaming (video) model," he

AOL, once known for its easy-to-use Internet dial-up modem service,
has watched millions of its subscribers flee to higher speed
offerings. Over the past two years, it has aimed to replace lost
services revenue with online advertising.

It has moved more of its once subscription-based music videos and
services to its free Web site to boost advertising.

He said In2TV was in discussions with other program owners, including
those not owned by Time Warner, to have their shows appear on the

Advertisers have been keen to get placement on AOL's online video
network, Conroy said. The company sold out its initial forecasts for
the amount of advertising inventory on In2TV, which it has now
expanded, he said.

By the end of the second quarter, AOL plans to expand its video
service to include paid downloads. It also plans a subscription
service sometime in 2007, the company has said. Downloads are expected
to cost about $1.99 per episode.


Some videos will be available using a system it calls Hi-Q video
format, which presents shows in DVD-quality.

Users would be required to download free software to enable computers
to store the videos on their hard drive.

AOL, which currently lets users search for shows and videos by actor
and title, in the coming weeks will allow searches by chapter or
notable spots in a show.

For example, actor Brad Pitt's 1987 guest appearance on "Growing
Pains" would be easily searchable.

"We want to make the (video) search experience more and more granular
as we see search as a primary navigation tool" for video, Conroy said.

AOL purchased video search engine technology company Truveo late last
year and Singingfish in 2003.

Copyright 2006 Reuters Limited.

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