SBJ/20090727/This Week's News

SEC calls big digital play with XOS

In an effort to make it the most widely distributed college conference in the country, the Southeastern Conference is teaming with XOS Technologies to form the SEC Digital Network, a broad online platform of content representing an attractive new revenue stream for the conference and its member schools.

The new network, the first of its kind in the college space to aggregate all sports content and distribute it in a centralized model, is expected to launch Aug. 27, just before the start of the college football season. The SEC’s launch will coincide with a redesigned SECsports.com, the league’s official Web site, which will offer more than 10,000 hours of original and exclusive video, including games and interviews. The archive is expected to grow beyond 20,000 hours.

The goal is to eventually provide an iTunes-like environment for past and future games, highlights, news, interviews, press conferences, recruiting updates and behind-the-scenes footage. All of that content won’t be available right away, but the network will evolve over time, both parties said.

“To be able to distribute SEC content across multiple platforms, it’s going to totally add value to the consumer experience,” said Randy Eccker, CEO and co-founder of XOS. “You can watch it at home on your 60-inch big screen or in an airport on your laptop or your iPhone on an SEC application. No longer is the consumer going to be limited by the technology. You’ll truly have access to content 24/7.

The goal is to provide an iTunes-like environment
for SEC games, highlights, news and more.

“This is an industry-changing agreement and concept.”

SEC Commissioner Mike Slive said, “Our goal is to be the most widely distributed conference in the country, and this network adds greatly to that goal.”

The two partners are still working on what the SEC Digital Network will look like when it debuts next month. Its branding will be prominent on the SEC’s site, which will be the lone portal to the network, while links to SECsports.com are available on the official athletic sites of the 12 member schools.

XOS technology will enable visitors to search and sort content, so whether they want clips of Peyton Manning’s longest touchdown passes or Tim Tebow’s touchdown runs, all highlights will be tagged and easily accessed.

The long-term rights agreement, which will be announced this week, represents a new revenue stream for the conference that previously didn’t exist. That new money, like most of the SEC’s revenue, will be shared among the 12 member schools.

XOS and the SEC are still working on the revenue model, but a mix of subscription and advertising will be incorporated. A subscription will likely be required for fans to have all access to the content.

Member schools retain the right to stream live events on their Web sites, as long as those events are not already being broadcast. The SEC Digital Network’s live streaming will be limited to select championships of Olympic sports at first, but could grow to include more live coverage as the network evolves.

The deal gives XOS rights to collect and manage SEC video content while distributing it to consumers and other businesses that have a use for the footage.

“The challenge was to structure a deal that takes everything into account in a new world,” said Robert Fuller, a partner in the law firm Robinson, Bradshaw and Hinson, which represents the SEC. “There are almost infinite possibilities when you talk about digital platforms, but you’re still talking about the SEC licensing its intellectual property rights and XOS figuring out how to make programming available to whoever wants to see it. So in some ways it’s still analogous to a broadcast agreement.”

The sales team at XOS Digital, a newly named unit within XOS Technologies, will handle advertising and syndication, while also working with other Web sites to distribute SEC content. So if AOL or Yahoo! needs highlights of last week’s SEC game, those sites will license it from XOS, which acquired Collegiate Images last year to obtain CI’s video vault and rights with an eye on a digital network.

“Sites are looking for compelling, rich media content to attract eyeballs,” Eccker said. “As the industry is evolving, digital advertising is blowing through the roof. It’s a highly formidable avenue for advertisers and sponsors to get into college athletics. You can reach more specific demos and you can track it.”

For the SEC to sell digital rights to XOS, it had to first negotiate the copyright to the games away from the broadcast partners, which previously has retained the copyright to the games they showed. News organizations previously obtained video from CI or the broadcasters.

The Big Ten was the first conference to take control of the copyright on broadcast games when it launched the Big Ten Network in 2007. The league has used that copyright to air classic games as part of its “Greatest Games” series. The Big Ten’s licensing partner, Denver-based Thought Equity, distributes its digital content.

When the SEC went into its TV negotiations more than a year ago, it had planned all along to retain its copyright to past and future games, with the bigger plan to use those games on its digital network.

“In order to own our own digital space, we had to gain the copyright and we were successful in doing that,” Slive said. “We knew that we wanted a state-of-the-art Web site so we thought about all of the resources that it would take to make that happen.”

Neither XOS nor the SEC would reveal the financial terms or the length of the rights deal, except to say it’s not as long as the conference’s 15-year TV deals with ESPN and CBS.

XOS Digital will run the site out of its Orlando headquarters. John Christie, formerly CI’s executive vice president, will serve as the digital network’s general manager and run the 20-person staff, while another 25 interns will work game days.

From the SEC’s Birmingham, Ala., office, Mark Whitworth, associate commissioner for external affairs, will be the network’s primary contact. He was part of a team of SEC associate commissioners, including executive associate Mark Womack, and TV consultant Chuck Gerber, who began as far back as two years ago formulating a digital strategy. Talks between the SEC and XOS on the full breadth of the digital offering began about 18 months ago.

“This is the culmination of a vision we had before the initial broadcast negotiations to make the SEC available to as many fans worldwide as possible,” Gerber said. “You look at CBS and ESPN, you look at our syndicated package that’s now in 54 percent of the U.S. households, and now this digital network. Any way a fan wants to see the SEC, they can see it.”

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