CNN News Group last week agreed to acquire a 2 percent
stake in Intervu Inc. in a deal the companies say will boost the amount of streaming video
content available on CNN and Turner Broadcasting System Inc.-owned Web sites.
Intervu said it will issue $20 million in common stock to
CNN in exchange for three years of free advertising and promos on the programmer's
properties. A growing number of media companies have recently been pursuing
equity-for-advertising deals, especially CBS Corp., which has acquired stakes in several
Internet companies in exchange for free advertising.
Intervu also won the right to distribute CNN-owned networks
to corporate clients, who will be able to view the networks on a personal computer.
Though CNN and Intervu executives said their core plan for
the consumer market is to offer streaming video via the Web, executives from both
companies said they may be able to use streaming video to deliver dedicated cable networks
directly to cable subscribers' homes.
"We have always explored whatever distribution vehicle
makes sense for us," said Bill Burke, the Time Warner Digital Media president and
CEO. The Intervu agreement is Burke's first major deal since he left his job as
president of TBS and Turner South in September.
Intervu chief operating officer Ed Huguez said his company
will also be able to deliver networks over the Internet to cable subscribers through cable
headends. However, the company is focused on delivering the programming
"primarily" to PCs.
As part of the deal, Intervu said it will provide
"fee-based Internet video management and delivery services" for three years to
CNN and TBS Web sites, including CNN.com, CNNfn.com, CNNSI.com, roughcut.com,
TBSsuperstation.com, tnt.turner.com, CartoonNetwork.com, wcw.com and
Intervu gets free advertising and promos on CNN, CNN
International, CNN Headline News, CNNfn, CNN/Sports Illustrated and CNN Airport Network.
Burke declined to discuss how many advertising units his company will provide in exchange
for the $20 million in Intervu stock.
"Because of this forthcoming broadband demand, we
believe it's critical that Intervu become a household name," Intervu chairman
and CEO Harry Gruber said, discussing the free ads and promos.
Shares in Intervu jumped 20 percent on Thursday, the day
the deal was announced, closing at $76.13.