Will AOL’s ESPN Deal Strengthen Its Video Strategy?
AOL Inc. (NYSE:AOL) may not be the powerhouse it once was, but a new partnership with Walt Disney Co.’s (NYSE:DIS) ESPN is another step toward firmly establishing itself in the growing video advertising business.
On Wednesday, AOL signed a syndication agreement with Disney-owned sports network ESPN in a push to acquire a bigger stake in the growing video advertising market. Under the terms of the agreement, ESPN will grant AOL syndication rights and join AOL’s digital publishing video-programming network, which also includes The Wall Street Journal, Sports Illustrated, and 1,700 other publishers, Bloomberg reports.
According to AOL Chief Executive Tim Armstrong, the move reflects the company’s efforts to transform into a content publisher driven by advertising. Ad rates for online video continue to outpace traditional Web ad placements as markets increasingly look to video as a way to run promotions. EMarketer Inc. says that digital video ad spending is projected to increase by 41 percent in 2013 to $4.09 billion in the U.S., and that number is sure to grow over the next several years.