CBS series move to Internet

Network signs deal with 10 online distributors

By BEN FRITZ

CBS' Web partners will have access to net's shows like 'CSI.'

CBS Corp. has unveiled a broad array of online distribution partnerships forged in the past few weeks on the heels of its decision not to join NBC Universal and News Corp.'s joint venture to put their content on the Net.

The Eye has landed all the major portals that the NBC U and News Corp. joint venture did -- AOL, MSN, and Yahoo! -- except for MySpace, which is owned by News Corp. It has also pacted with a number of smaller partners that are either focused on high- quality video or community sites getting their first premium content, including Bebo, Brightcove, CNET, Comcast, Joost, Netvibes, Sling Media and Veoh.

"I don't think the world needs another portal," CBS Interactive prexy Quincy Smith said of the decision not to sign on with NBC U and News Corp. The two plan to build their own video portal on the Web in addition to working with a variety of partners.

"The joint venture blazed a great trail," Smith added. "But we thought, Why not make a few calls and see if we can go direct? It only took eight days to pull together all these partners."

There was another reason CBS moved quickly: The broadcast upfront season is just a month away, and the Eye wants to make sure its new online strategy is front and center in advertisers' minds as they begin lining up to do deals.

"We'll use it in all our conversations in terms of sponsorships," said JoAnn Ross, head of sales for CBS. "We'll start to monetize it as soon as possible."

Industry insiders believe nets like CBS could pull in three to four times the digital coin they generated last year, thanks to announcements like the one the company made Thursday.

As with the NBC U-News Corp. venture, CBS is believed to be keeping about 88% of the advertising revenue around its shows and giving 12% to distribution partners. But by going it alone, CBS doesn't have to share any of that 88% with anyone else.

Eye insiders compare the plan to the syndie biz model of barter, where local stations pay nothing for content but agree to split the advertising time with the supplier.

While Smith wouldn't rule out working with the NBC U-News Corp. joint venture on a nonexclusive basis, CBS' decision to go it alone could be a blow to NBC and News Corp.'s plans as it demonstrates that other big media companies can reach the same distributors (save for MySpace).

Execs from the joint venture are already talking partnership deals with several of the smaller Web sites with which CBS is working.

All players involved expect that by the end of the year, content from the big broadcasters and some cable networks will be available across a broad array of Web sites. Only stumbling block may be for some cable networks that are prevented from doing so in their carriage agreements with cable operators. In addition, nets like ABC have affiliate deals that limit how much of its content can go online.

"A lot of companies are still cautious, but you will definitely see a big acceleration of TV content going online this year," said Jeremy Allaire, CEO of online video company Brightcove, one of CBS' new partners.

Debut of CBS Interactive Audience Network, as the net is calling its new venture, by the summer will also amplify questions about how availability of shows online affects TV ratings, as well as future syndication and DVD sales -- particularly since some of the Eye net's partners, including Joost and Veoh, stream video suitable to watch on a TV.

"We're focused on letting people sit back to watch high quality video with a remote whether it's on a PC or TV," said Veoh CEO Dmitri Shapiro. "There are no real limitations in this deal on doing that."

While on-demand options have been blamed for declining ratings for repeats, Smith pointed out that broad availability could help turn a much-buzzed-about show into a major hit.

"Let's say we have a comedy that airs on Monday and it's amazing," he posited. "On Tuesday we distribute it to all these guys in our huge network, and by Friday, it could add up to Super Bowl-like stats. Now we have to start working with the Nielsens of the world to get all that counted."

Ross believes the Eye will end up making more coin from the mix of online and broadcast platforms.

"The combination is going to be worth more (coin)," she said. "That's what we're betting on."

Exec said CBS will offer a mix of options for advertisers, including bundling time on the CBS Interactive Audience Network with sponsorship of on-air broadcasts or doing deals for just the online service.

CBS plans to offer partners all of the same content it streams on its Web sites, which basically means the primetime shows it owns such as the "CSI" franchise and "Survivor," along with news, sports, "Late Show With David Letterman" and some library content. Partners will get the opportunity to stream full-length shows or clips.

In some cases, users will be allowed to embed CBS video on their own personal Web sites, blogs or MySpace pages.

Eye will sell most of the ads surrounding its content but in some cases will give partners the opportunity to sell any remaining inventory.

In addition, net is planning to build its own video player. But unlike the NBC U-News Corp. joint venture, it also plans to let some partners present CBS content via their own video players.

With such a broad array of deals, all of CBS' partners will end up competing with one another, as well as with CBS.com, to have the most appealing presentation of "CSI" or "Late Show With David Letterman."

"Content parity means that everybody, including us at CBS.com, have to think about what we're good at and what makes online presentation special," said Smith.

Brightcove is already working on a tool that will let users edit and remix some CBS content, along with other videos. Veoh will have an option allowing users at work to pick videos that they want to have waiting to watch when they get home.

(Josef Adalian contributed to this report.)