Computing giant Microsoft and entertainment conglomerate Viacom have inked a long-term content distribution and advertising agreement that, among other things, will see Viacom television and film content made available via MSN and the Xbox 360. Although neither company disclosed the full financial terms of the deal, the arrangement has a “projected base value” around $500 million in its first five years.
“We are very impressed with how closely Microsoft’s business plans complement our strategic objectives,” said Viacom president and CEO Philippe Dauman, in a statement. “This is a novel and comprehensive partnership that demonstrates the scale of our digital operation and the value of our branded content across all distribution platforms.”
Under the deal, Viacom will provide Microsoft with a variety of content from MTV Networks, Paramount, and BET Networks for distribution via MSN.com and Xbox Live Marketplace, including short-form, television, and theatrical content. Viacom will also provide casual games to Microsoft for distribution to Windows and Xbox users.
In exchange, Viacom gets access to Atlas AdManager, Microsoft’s online ad serving solution that came along with the company’s $6 billion acquisition of Aquantive earlier this year. Viacom anticipates using Atlas to more deeply monetize online properties supporting MTV, VH1, and Comedy Central; Viacom will also let Microsoft resell unsold ad space on its sites in a revenue-sharing arrangement.
“This deal is another milestone in our quest to build a world-class advertising platform to serve the broad needs of advertisers and publishers,” said president of Microsoft’s Platforms and Services Division, Kevin Johnson, in a statement. “If ever there was a ‘win-win’ partnership across two companies, this is it.”
