Pegasus Hyper-Local Deal With Fox Affil Unravels

Pegasus News, the social network site based in Dallas, made a deal with Fox4 TV for a mutual content swap that would fill Pegasus' news hole, leverage its features (weather, etc.) and increase awareness about it in the community. At the same time, the deal called for the Fox affil to tap into Pegasus' trove of hyper-local content and boost traffic for any video carried by Pegasus. Indeed, Pegasus took to calling itself a “hacker with permission.”

But not so fast. The deal was broken off before it really began, apparently by corporate officials in New York who had second thoughts about teaming up with the young hotshots at Pegasus. To be sure, the aborted deal cost Pegasus plenty of time and money  it had already switched from Topix to FoxNews for its national and regional news crawl, and also made plans to switch from AccuWeather to FoxWeather, and even do some joint local election coverage.

There were also some opportunity costs involved. Site publisher Mike Orren says he was in talks with several Dallas-area TV stations but others wanted exclusivity, which was a deal killer. Pegasus chose to go with Fox instead. Orren says he didn't even resist when Fox asked Pegasus to kill the irreverent pieces on Fox's local weatherman.

Despite Fox's cold feet, the way the deal was structured serves as a possible model for other TV station/social network ties. One advantage: The TV station stood to keep all the ad revenues from pre-rolls on video that was shown by Pegasus. Increasing distribution is one way for a station to build an Internet business.