This morning the The New York Times is reporting a breakthrough deal between Viacom and the creators of South Park. What is most exciting is the fact that the deal sets the stage to redefine the business model between advertisers, networks and content:
Television networks have long maintained a wall between ad revenue and the compensation they pay the talent. As recently as 2000, Leslie Moonves of CBS erupted upon realizing that Mark Burnett, the creator of “Survivor,” had been given a share of revenue from its first season — saying this was tantamount to letting the inmates run the asylum — and a new deal gave Mr. Burnett a much bigger license fee instead.
Doug Herzog, president of MTV Networks Entertainment, acknowledged that the 50-50 digital deal, which was approved by Philippe P. Dauman, Viacom’s chief, would set a precedent. “If this is seen as a bold stroke, all the better, because it’s going to take bold thinking to move ahead,” he said. But he said it was justified by the “South Park” team’s stellar track record and by the changing balance of power between the buyers and creators of entertainment.
And further blurring the lines, KateModern, a UK show delivered on a social networking site is stealing ad revenue from networks:
KateModern is screened in two-minute episodes five days a week on Bebo, the social networking site that has 36m users, including 10.7m young people in Britain. "If anyone here hasn't heard of Bebo, it's basically heroin for 14-year-olds,'' quipped comedian and panel chairman Dara O'Brien.
Mark Cuban can grouse all he wants about how the Internet is "dead and boring" but here at GIGANTIC, we think things are just starting to get interesting.