MSN Grabs First-Run Studio Content

Two deals were announced to distribute Hollywood studio content this week. The first, reported by MSNBC, involves the sale of the episodic television show "Arrested Development" to Internet portal MSN and cable networks HDNet and G4. (Read: Warner and Apple here).

This is the first time a Web portal has purchased first-run syndicated content at the same time the studio licensed it to cable networks. MSN will have the rights to the shows for three years beginning later this year. It will allow MSN subscribers to access the television show for free and include other interactive elements. The plan is to generate ad revenues against the content. No official word on whether this is part of the strategy for Microsoft's Zune launch, but digital music and movie content will play an increasingly large role in pushing services and devices.

We expect to see more studio and record company deals where portals and device manufacturers purchase the syndication and digital subscription rights. In turn, music and movies will be offered at reduced prices (or free) to consumers as part of a larger subscription package or to drive device sales by promising interoperability.