The Associated Press and Microsoft Corp. said Wednesday they are jointly developing a video network that would deliver daily news and advertising to AP members' Web sites.
Under the deal, Microsoft's online division MSN would provide the video player and technology for streaming the content, the companies said. Participants in the AP Online Video Network would get a custom-branded player and a share of the advertising revenue.
MSN would also sell the advertising for the fully ad-supported service. AP plans to make the network available in the first quarter of 2006 to more than 3,500 AP newspaper and broadcast members in the United States.
"This partnership will empower AP members to compete in an emerging segment of Web content," Tom Curley, president and chief executive of AP, said in a statement.
As the number of broadband subscribers increase, video services are growing in popularity. Entertainment portals like Yahoo Inc. America Online Inc. and MSN, have been adding more video content to attract visitors and keep them on the sites longer.
More than 94 million people, or 56 percent of the online U.S. population, have watched streaming video, according to Web metrics firm ComScore Networks.
At the same time, ad revenues from video is rising. In the first half of this year, online ad revenues reached a record $5.8 billion, a 26 percent increase over the same period a year ago, according to the Interactive Advertising Bureau and PricewaterhouseCoopers.
In the AP deal, MSN also will develop other network products, including a local advertising and content syndication system for AP affiliates.
The agreement marks the first time MSN has syndicated its video player outside its network, the companies said. MSNBC.com, however, will continue to be the exclusive video news content provider for MSN sites.