NBC and Tribune also are part of a group that invested $30 million in The FeedRoom. Under the terms of the new agreement, NBC and Tribune will make video content available for The FeedRoom to broadcast over the Net via its Web site.
Scheduled to launch in late August, The FeedRoom has set its sights on becoming the broadcast news site for the Web, said its chief executive, Jonathan Klein. In March, the company signed similar content deals with USAToday.com and Reuters.
Like other broadband companies, The FeedRoom has waited for the public to warm to high-speed Internet access. Klein believes that time is now. He estimates that 31 million people use the Net through digital subscriber lines (DSL), cable modems or other broadband lines every day.
But naysayers argue that too few companies have shown they can make money by offering broadband content. Digital Entertainment Network, which offered entertainment over broadband, closed its doors in May. FastTV provided news text with some video, but it shut down last month.
Klein said he believes the public wants news but prefers watching it over reading it.
"News is central to everyone's life," Klein told CNET News.com yesterday. "You need it to figure out what you should wear outside, what route to take to work. And news plays into the strengths of (NBC and Tribune). We know the public wants news. There's been a beta test going on for 50 years; it's called television."
This partnership with NBC and Tribune is more than a financial investment, Klein said. The companies are backing The FeedRoom and broadband content with their reputations.
"They're investing with their names, their brands," he said. "This is an enormous validation."
The FeedRoom, based in New York, will have access to news clips from 29 NBC and Tribune TV stations, and the privately held company will create co-branded video portals on its site for each. The deal gives The FeedRoom news coverage from nine of the top 10 TV markets, the company said.
Klein, a former vice president of CBS News, has built a management team of former executives from all four major networks: ABC, CBS, NBC and Fox Television. He said backers are betting that with this kind of talent and experience, The FeedRoom's brain trust can turn a profit quickly.
The company's revenue model, Klein said, is based on advertising, a strategy that has worked for television for decades.