But oddly, the deal is the only one of its kind. While the big music labels have played footsie with Hulu in the past, they have yet to actually move any of their clips there.

That could still happen one day, and the site hints that you may see more clips coming down the road. But Hulu is less valuable for the labels than it could have been a year ago: Since then, three of the big four have struck deals that give them much more incentive to show their stuff on Google’s (GOOG) YouTube, the world’s biggest video site.

Vivendi’s Universal Music and Sony (SNE) have a deal that locks up their stuff exclusively on Vevo, a sort of “Hulu for music videos” that will be powered by YouTube. And Warner Music Group (WMG) has convinced YouTube to give the label its own branded channel for its clips.

No word on financials for the Hulu deal, but I’d surprised if this generates much cash for EMI. Hulu’s core partners–News Corp.’s (NWS) Fox, GE’s (GE) NBC Universal and Disney’s (DIS) ABC–have deals that let them keep 70 percent of any ad revenue their stuff generates on the site. But other partners get closer to 50 percent.

In other Norah news, my soon-to-be sort-of neighbor is having construction problems. Here she is taking on one of the great Wilco songs:

That’s the pitch Apple has been making to TV networks in recent weeks. The company is trying to round up support for a monthly subscription service that would deliver TV programs via its multimedia software, multiple sources tell me.

Apple (AAPL) isn’t tying the proposed service to a specific piece of hardware, like its underwhelming Apple TV box or its long-rumored tablet/slate device. Instead, the company is presenting the offer as an extension of its iTunes software and store, which already has 100 million customers.

A so-called “over the top” service could theoretically rival the ones most consumers already  buy from cable TV operators–if Apple is able to get enough buy-in from broadcast and cable TV programmers.

That’s a big if: Apple has told industry executives it wants to launch the service early next year, but I have yet to hear of a single programmer that has made a firm commitment to the company, which has tasked iTunes boss Eddy Cue with promoting the idea.

Industry executives believe that if anyone jumps first, it will be Disney (DIS), since CEO Bob Iger has shown a willingness to experiment with Apple and iTunes in the past: In 2005, Disney was the first player to sell its programming on iTunes, via a-la-carte downloads. And Apple CEO Steve Jobs is Disney’s largest single shareholder, a result of Disney’s 2006 acquisition of Jobs’s Pixar animation studio. Apple didn’t respond to requests for comment.

Network executives I’ve talked to are intrigued by the idea–they are eager to find new revenue streams–but are also wary, for several reasons.

Cable networks, for instance, don’t want to threaten existing relationships and subscription fees from cable providers like Comcast (CMCSA). And programmers are also worried about the effect a subscription service would have on advertising revenue: Even if the service didn’t distribute TV programs until after their initial air date, that could cut into ratings, which now measure viewership over the course of several days.

But the move to deliver TV and movies over the Web is already well under way. Netflix (NFLX), for instance, already bundles free streaming movie and television along with its disc-by-mail subscription service. iTunes and Amazon (AMZN) rent movies on a one-off basis, and Google’s (GOOG) YouTube is trying out the same thing. Meanwhile, Hulu, the joint venture between GE’s (GE) NBC, News Corp.’s (NWS) Fox, and ABC, is figuring out how to launch a paid service that may include rentals, paid downloads or subscriptions.

So Apple’s proposed subscription service, which the company has floated in the past, is no longer a huge stretch. Says one executive briefed on the company’s plans: “I think they might get it right this time.”

The short version is that unlike its broadcast peers, CBS (CBS) has been reluctant to make many of its shows available on the Web because it worries that doing so cuts into its core TV business.

So while GE’s (GE) NBC Universal and News Corp.’s (NWS) Fox put Hulu together, CBS stayed away. And when Disney (DIS) decided to join the joint venture earlier this year, CBS executives argued strenuously against the deal. Instead, CBS has been content to use the Web as a promotional tool for TV via outlets like Google’s (GOOG) YouTube.

The longer version is below, via the transcript of a brief chat I had with Smith this afternoon to discuss his plans and the network’s. This is stuff he’s talked about before–to reporters, in industry forums, and even via emails he wishes he hadn’t written–but I’m running it at length here.

Because 1) I think Smith does a good job of explaining the push-and-pull of Web viewership vs. Web economics that everyone in big media is grappling with, and 2) I want people to see just how difficult it is to keep up when Smith talks. He can get out a lot of words in a relatively short time.

I also had a quick chat with CBS CEO Les Moonves, who made many of the points Smith did, but with less verbiage: I’ll get you that transcript shortly, too.

Peter Kafka: Since you’re going to be advising CBS’s Web video strategy, why don’t you lay out, for the record, where things stand?

Quincy Smith:

We recognize that the Web is two things. It’s both a new medium…and there my example has always been, look at fantasy football: When you’re nice enough to watch the Jets just pound the snot out of the Raiders on Sunday, on a CBS channel…on fantasy football on CBSSports.com, you start on the Tuesday before and end the Wednesday after.

And what are you doing? You’re personalizing it, you’re becoming more of a fan of the game [Smith goes on to praise CBSSports.com's feature set]. All of those things are additive, so when Sunday comes in, you’re actually more of a fan, and you’ve even more convinced you’re going to watch that broadcast show.

Now, I realize that sports is reasonably bulletproof, and a good case study to begin with versus some of the other programming, but the fact is, the Web is a new medium. So what do I also mean? Tech reviews on CNET, Money Watch being watched on BNET. GameSpot videogame reviews.

Access to content that CBS didn’t already have, that are additive–both in their own right online, with the margins that the CNET business is used to, and where we’re getting just stronger and stronger from a margin perspective–and potential content that can also be applied to our [local TV stations owned by CBS], our affiliates, our broadcast news, as well as the radio. So that’s the side of our business that is $600 million revenue and $50 million-plus profit on the bottom line.

The other side of the Web, the side that is most thought of by many journalists, is the threat of an IP-deliverer of video. And how you turn that threat into an opportunity.

And so, from that perspective, as  you know, we didn’t go ahead and say, “Okay, we’re going to lock down and stream, with all of our other peers in broadcast, and come up with the same rules, and embed and right-click this and go away.” I’ve never had a beef with Hulu. Hulu’s always worked as a great service. That’s part of the problem.

As a network, we need to make sure that our content is being seen where the dollars matter. And right now that’s on air. Opportunities like TV Everywhere–we’re not putting all of our eggs in that basket, though we are big advocates of it–are ones where you can actually take and expand and extend the television market online, so it doesn’t matter what screen you watch “CSI” on; what matters is that you watched it, it counts and you saw the ads.

But until that happens, it’s crazy to just stream the shows for zero economics. When in fact you can make a lot more money doing things that are additive and complementary to the rest of the CBS line. That’s where CBS interactive comes in now.

Kafka: But TV viewers are showing an increasing interest in watching their programs on the Web, whether from legal services like the Web or illegal torrents and pirate sites. Don’t you need to reach them where they are?

Smith:

Now, if you really look at those numbers, what they’ll say is [online and offline video are] both growing, right? We’re having the best year ever as America’s largest broadcast network, and I think that 99.9 percent of that–this is the quote I’ve never been able to get in there–is that’s [because] of the great content that we have. There’s some infinitesimal basis point that’s relevant [to CBS ratings because] we are making sure that when people watch it, they’re more inclined to watch it on television. For now.

Once that solution moves, once those economics move–whether that’s more ads, [higher] CPMs, more ad buyers….You and I can say all day long, “We’re sold out on Web video. That’s going really well. It’s sold out.” Well, no kidding, it’s sold out. It’s a $700 million market. The television market is $120 billion. And of that, $700 million, half of those [ad buyers] are spending  90 percent of their time doing Google keywords, not buying online video.

The key is, how do you turn television buyers into video buyers? And that’s where a solution like TV Everywhere comes into play.

And by the way, looking at [Hulu CEO Jason] Kilar’s comments the other day, in Colorado [at an industry convention], he sees that too. He’s more sophisticated on this stuff than most anybody. From the perspective of, he understands that’s where the big dollars are. And so he probably went at it as, “I’m going to aggregate all the people first, so hopefully things like TV everywhere come to us.” From our perspective at CBS, we’ve got to go to them.

I don’t hate Hulu. Hulu’s world-class video viewing. What I don’t understand is, why license all that content to something that works that well, that seamlessly, yet–without the economic model around it?

What happened? Apparently, Microsoft (MSFT) realized that “Family Guy” is a ribald, off-color sitcom–but only after showing up to the taping of “Family Guy Presents: Seth and Alex’s Almost Live Comedy Show.”

Variety says “Family Guy” creator Seth MacFarlane and actor Alex Borstein did indeed promote Windows 7 during the Oct. 16 taping. Alas, “for most of the special, however, MacFarlane and Borstein made typical “Family Guy” style jokes, including riffs on deaf people, the Holocaust, feminine hygiene and incest.”

Whoda thunk?

Give Microsoft credit, though: At least the company figured this one out before the show actually aired–unlike the vomit ads it used to push Internet Explorer 8 last year. And, in defense of MacFarlane and Borstein, Google (GOOG) hasn’t seemed to run into any problems with the pact it struck with MacFarlane last year.

Microsoft’s backpedal, via Variety:

“We initially chose to participate in the Seth and Alex variety show based on the audience composition and creative humor of ‘Family Guy,’ but after reviewing an early version of the variety show it became clear that the content was not a fit with the Windows brand,” said a Microsoft spokesperson. “We continue to have a good partnership with Fox, Seth MacFarlane and Alex Borstein and are working with them in other areas. We continue to believe in the value of brand integrations and partnerships between brands, media companies and talent.”

Here’s a representative sample of the show Microsoft was betting on: A clip that Hulu says is one of its users’ favorites. Warning! The following includes flatulence, some sex talk and some racial stereotyping. No mention of Microsoft products, though.

Is Hulu putting up a pay wall around its Web TV site? Nope.

Does Hulu want to charge people to watch Web TV? Yes.

Confused? Don’t be.

It’s pretty straightforward: Hulu, the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC Universal and Disney’s (DIS) ABC, doesn’t plan on charging people to watch the stuff it’s currently airing on the site–a mix of first-run shows from broadcast TV, a limited number of cable TV shows and a smattering of movies. But Hulu is trying to figure out how to create some kind of premium offering where you’ll pay for stuff that isn’t on the site right now.

That’s what Hulu’s backers have been saying for months, so it’s a little puzzling that News Corp. COO Chase Carey’s comments got folks worked up yesterday. Meanwhile, multiple sources familiar with Hulu’s plans tell me that…Hulu doesn’t actually have a plan yet, but it is trying to piece one together.

There are some pretty obvious ways to go here. Hulu could sell movies or TV shows on a pay-per-view basis, or it could sell subscriptions to shows it doesn’t offer now or to a deeper offering of shows it already has. You could call it “Hulu Plus” (no charge for that one, guys).

If you’re a fan of Fox’s “Family Guy,” for instance, Hulu is only of limited help: The site only has the most recent five episodes. So how much would you pay to watch the rest of them?

If you don’t have an answer for that, don’t worry–Team Hulu doesn’t know, either. Nor can they tell you if airing free shows on Hulu has cut into other revenue streams like broadcast TV advertising or DVD sales, even though “we’ve done a thousand regression analyses on this,” says an industry executive involved in the site.

Do bear in mind that this was a problem Hulu’s backers didn’t really envision when they were dreaming up the site; at the time, they were most concerned with building a video site that would allow them to barter with Google (GOOG) and Apple (AAPL).

Now they own one of the biggest video sites on the Web, one they say is performing ahead of plan. And Hulu is selling enough advertising that it’s coming close to reaching break-even, according to executives I spoke to this week.

But at the very least, adding a pay component to Hulu helps mollify those who fear the site is cannibalizing their existing businesses. Or who simply want another revenue stream. And a pay element dovetails with Hulu’s interest in joining up with the “authentication” movement pushed by cable guys like Comcast (CMCSA) and Time Warner (TWX).

Meanwhile, here’s the use case for Hulu that its backers originally envisioned–“catch up viewing.” I was on a plane when last night’s episode of the “The Office” aired, but I can watch the whole thing–with ads I can’t skip–on my laptop today. And so can you:

Check it out (click tables to enlarge):

Note that these numbers are actually all down from August. Apparently some of you spent your last days before returning to work or school in front of your Web browser.

Meanwhile, Nielsen’s Top 10 list has the usual suspects. That is–Google’s (GOOG) YouTube and then everyone else. Interesting to note the disparity between total audience and total streams on Hulu compared to Yahoo (YHOO) and Microsoft’s (MSFT) MSN. Hulu is attracting a smaller but much more engaged audience than the big portals.

At some point, this could be a problem for the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC Universal and Disney’s (DIS) ABC since advertisers ultimately want reach. But it’s still astonishingly early for the site–recall that it only went out of beta in March 2008, and doesn’t have a major portal promoting it.

One caveat: Note that for whatever reason, Web video publishers tend to push the numbers they get from comScore (SCOR) more than the Nielsen numbers. But directionally, they tend to say the same thing.

Allrighty, then. If you’re going to spend so much time watching Web clips, best to make sure you’re watching something excellent. Like this clip from last night’s “The Daily Show”–a classic evisceration of CNN. Jon Stewart and crew often go after the cable channel and its brethren, but this one is particularly good. Warning! It is more than 11 minutes long!

The numbers come from Nielsen’s quarterly “Three Screen” report, which measures eyeballs watching video on TV, on the Web and on mobile devices. And just like the report Nielsen put out three months ago, it shows that even while Americans gobble up more online video, they’re still watching as much TV as they ever have. More, even: The number of viewers increased by 0.9 percent, while the time they spent watching TV increased 1.5 percent.

Here’s how the numbers break down (click tables below to enlarge):

Total number of viewers:

Time spent viewing:

Two different theories, which are not mutually exclusive, may explain the ever-increasing amount of video we’re supposedly gorging on:

• We’re out of work or underemployed, and we’re filling those hours with sitcoms and dogs-on-skateboard clips.
• We’re multitasking and gorging on all of this stuff at the same time.

On that last theory: Nielsen says 57 percent of us are spending at least an hour a month watching Web video and TV at the same time. We’re much more likely to turn on the TV while we’re Web-surfing than vice versa, though.

No surprise, by the way, to see that people are spending more time watching Web video. But interesting to note that while the universe of mobile video watchers has increased, they’re spending less time watching.

For what it’s worth, Nielsen says that short-form clips–like those from Google’s (GOOG) YouTube–make up 83 percent of Web video viewing, while “name-brand TV network content” makes up the majority of mobile video. Note that Hulu, the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC and Disney’s (DIS) ABC, doesn’t have a mobile option, so it can’t claim credit for those eyeballs.

Too many numbers! Time for video. Here’s a clip of the Minnesota Vikings’ (!) Brett Favre from this week’s “Monday Night Football” game. This one has been seen more than half a million times, but there’s no way it’s legal. So it will go down sooner or later–both the NFL and ESPN are pretty zealous about this stuff.

But right now it’s promoted for all to see on YouTube’s homepage. Which means there are still some kinks in the company’s vaunted “ContentID” program.

Does Google need a Hollywood guide?

It may be getting one: Jim Wiatt, the former head of the fabled William Morris talent agency, has been talking to the company about a consulting gig for its YouTube video site.

Wiatt, who is leaving his old job in the aftermath of his agency’s highly contentious merger with the Endeavor agency, discussed the idea with Google and YouTube executives in Mountain View last week, multiple sources said.

Wiatt hasn’t signed a deal and may end up pursuing something else instead, I’m told.

But the role would make sense, given that Wiatt has already served as a de facto guide for Google CEO Eric Schmidt, who has been trying to ingratiate his company with studio and network executives for some time.

(Schmidt has spent enough time in Hollywood to justify plunking down a reported $20 million for an estate in Montecito, a wealthy resort town an hour or so outside of Beverly Hills.)

Google (GOOG) has tried to convince Hollywood to bring more of its content over to the world’s largest video site, but its biggest players have so far resisted, offering the site promotional trailers but little else. Meanwhile Hulu, the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC and Disney’s (DIS) ABC has staked out a reputation as the go-to site for free “premium” movies and TV shows.

Earlier this year, reports surfaced that William Morris and Google had reached a pact that would steer the agency’s high-profile clients to make and star in YouTube videos.

Neither company ever formally acknowledged the so-called “YouTube Gold” program, and it’s not clear if it ever got off the ground. But, in any case, William Morris has more or less been absorbed by onetime rival Endeavor, headed by Ari Emanuel, leaving Wiatt looking for other work.

Wiatt, via a spokesman, declined to comment. YouTube offered up this statement via email: “We are constantly exploring opportunities to reward the talented members of the YouTube community, including helping to distribute their content around the Web and beyond.”

[News Corp. owns Dow Jones, which owns this Web site.]

[Image credit: Sorn]

Bob Bowman, CEO of Major League Baseball Advanced Media–pro baseball’s standalone digital media company–tells me iPhone and iPod touch users will soon be able to buy individual games. The feature will be added to the company’s existing MLB.com app and will roll out as soon as Apple (AAPL) finishes approving the update, which Bowman expects to happen within the next few days.

As far as I know, that will make baseball the first pro sports league to sell mobile access to live games on an on-demand, a la carte basis.

The current version of the MLB.com app, which sells for $9.99, gives users the ability to watch a couple of live games each day, but MLB.com selects the games. And those who own both the app and subscribe to baseball’s MLB.TV–an all-you-can eat subscription service–can stream any live game they want to their phones. iPhone and iPod touch users have bought about 250,000 downloads of the app.

Bowman, not surprisingly, says he’d prefer to sell the app-plus-Web subscription together, but says he’s offering the games a la carte as an experiment to gauge demand. The test will run through the rest of the regular season, which ends Oct. 4.

News Corp.’s (NWS) Fox and Time Warner’s (TWX) Turner, the two networks that own the rights to the baseball playoffs and World Series, have a Web blackout for the TV broadcasts of those games. (Bowman says he is working with both networks to offer a compromise to iPhone app users–a “four screen” version with live, stationary feeds of the game–so that, for instance, you may be able to see the dugout, etc. Pricing, if any, still undetermined.)

There is one other restriction to the offer, and it’s the same one that exists with the Web subscription service: You can’t watch games that are broadcast in your home market. That is, I can watch the Minnesota Twins play on an iPhone if I’m in Brooklyn, but not in Minneapolis.

Discovery joins other big names like CBS (CBS) and Time Warner’s (TWX) HBO and Turner, in Comcast’s (CMCSA) “On Demand Online,” which launched last month in a few thousand homes. The program is designed to convince Comcast subscribers to stay on as subscribers, since only subscribers will get Web access to the programming. It’s an answer to Hulu’s offering, which makes shows from News Corp.’s (NWS) Fox, GE’s (GE) NBC and soon, Disney’s (DIS) ABC available to anyone with Internet access.

It’s a variation of the “TV Everywhere” program Time Warner has been touting, and similar to ones that other cable providers, like Time Warner Cable (TWC), and telcos like Verizon (VZ) and AT&T (T) are pursuing.

Like most of the other networks that have linked up with Comcast for the On Demand test, Discovery isn’t handing over its top-tier stuff. You can’t see “Deadliest Catch,” the network’s show about grumpy Alaskan fishermen, for instance.

Meanwhile, some of the stuff you can get will be “windowed”–the industry’s term for holding shows back from viewers to maximize TV eyeballs. Episodes of something called “Verminators,” for instance, won’t be available until a week after they air on TV. But! Comcast subscribers will be able to watch episodes of “Man Vs. Wild” and “Swords,” which will be available the day after they air.

And any full-length programming that Discovery puts on the Web is a change for the cable network, which has held off from doing so precisely because it didn’t want to upset Comcast, which pays it a hefty fee for its programming.

Related note: I hate the “On Demand Online” tag Comcast uses to describe this strategy. And the Comcast people hate it when I call this “Web TV you’ll pay to see.” Their point is that you’re not paying any additional fees in order to get this stuff on the Web; my point is that only paying Comcast subs can see this stuff, as opposed to Hulu’s free-for-all (for now) offering.

So, can anyone suggest a different name? Give me a good one and I’ll use it.

Meanwhile, here’s a “Man Vs. Wild” clip featuring a pesky porcupine:

Boxee has a small but passionate following of some 600,000 users, and it’s gotten a lot of attention this year, much of it via a fight with Hulu, which doesn’t want its video showing up on Boxee browsers.

But Boxee doesn’t have any revenue, or much of a concrete plan to generate any in the near term: The software is free for consumers, and while CEO Avner Ronen thinks there could be some rev-share possibilities with Web video providers down the road, they’re…down the road.

So what’s the appeal for company’s backers, which also include Union Square Ventures and Spark Capital, which put $4 million into the company eight months ago and participated in this round as well? It’s pretty straightforward: The $70 billion TV business is in the first steps of a massive reordering, and perhaps Boxee can play a role in it.

The chief appeal is that Boxee can function as an “over the top” alternative to cable TV, giving users the ability to get their favorite programs on a big screen without having to pony up to the likes of Comcast (CMCSA). Ronen wants to use some of his money to ramp up efforts to strike deals with consumer electronics companies like Sony (SNE) and LG, which are pushing Internet-connected TVs, and Microsoft (MSFT), whose Xbox game console is increasingly functioning as an entertainment hub.

But there are plenty of other players jockeying for similar positions, from services like ZillionTV to device makers like Roku, and even Apple (AAPL). And Boxee’s status as a potential disruptor has a downside as well: It’s the reason that Hulu, backed at the time by News Corp.’s (NWS) Fox and GE’s (GE) NBC, sought to prevent the service from accessing its shows earlier this year.

That said, there hasn’t been much saber-rattling from either side in recent months. Perhaps this has to do with Disney’s (DIS) ABC, which had previously enjoyed friendly relations with Boxee, coming aboard the joint venture.

Here are a couple interviews I’ve conducted with Ronen this year: The first one was taped at the Consumer Electronics Show show in January, when his start-up was soaking up the first wave of attention from the TV industry; the second was taped in March, after Boxee had attracted Hulu’s ire.

]]> http://mediamemo.allthingsd.com/20090812/web-video-darling-boxee-gets-another-6-million-are-zero-revenues-and-big-plans-worth-25-million/feed/ 2 http://mediamemo.allthingsd.com/20090810/are-network-tv-ad-sales-terrible-or-just-bad-and-when-will-we-know/ http://mediamemo.allthingsd.com/20090810/are-network-tv-ad-sales-terrible-or-just-bad-and-when-will-we-know/#comments Mon, 10 Aug 2009 14:52:33 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=9739 The TV industry’s traditional “upfront” sales season–the networks’ springtime sprint to hawk most of their ad inventory for the coming year–has come to a close. Which means it’s time for another TV industry tradition: Guessing how much ad inventory the networks sold during the upfronts.

Estimates vary widely, but they’re all bad–as we thought they would be. Variety says ad agencies think the four broadcast networks–News Corp.’s (NWS) Fox, Disney’s (DIS) ABC, GE’s (GE) NBC and CBS (CBS)–plus the pint-sized CW, may have seen sales drop by 10 percent to 12 percent compared to last year. Ad Age thinks the decline could by as much as 15 percent. Mediaweek says sales are down a staggering 22 percent.

The other bit of consistency is the explanation for the drop, which is two-pronged: Sales are down both because the economy is bad and because the networks are offering less inventory than they normally would. They’re holding back lots of their spots in hopes of selling them at higher prices later in the year, presumably when the economy comes roaring back.

I’ll let bigger brains than mine handicap the odds of that happening (but for the record, you can color me skeptical). In the meantime, let’s see what depressed TV ad prices do to prices for Web video ads.

]]> http://mediamemo.allthingsd.com/20090810/are-network-tv-ad-sales-terrible-or-just-bad-and-when-will-we-know/feed/ 0 http://mediamemo.allthingsd.com/20090714/now-things-get-interesting-cbs-joins-comcasts-web-tv-trial/ http://mediamemo.allthingsd.com/20090714/now-things-get-interesting-cbs-joins-comcasts-web-tv-trial/#comments Tue, 14 Jul 2009 15:09:42 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=9219 Yet another addition to the growing list of programmers signing on to Comcast’s “On Demand Online”: CBS will join the cable provider’s trial program, which will allow subscribers to get Web access to shows they get on TV.

CBS (CBS) will join previously announced partners Time Warner (TWX), which is offering up programming from its Turner channels and HBO; Liberty Media’s Starz; and smaller players like Scripps, Rainbow and A&E. The twist is that CBS is the only broadcaster to sign up for the trial.

I noted that this was in the works last month, and it makes plenty of sense: For one thing, CBS would like to tie up with Comcast (CMCSA) as a way to extract “retransmission fees” from the cable company for the rights to carry its programming, which it currently doesn’t get paid for. The broadcaster also needs a big ally, as its broadcast competitors at GE’s (GE) NBC, News Corp.’s (NWS) Fox and Disney’s (DIS) ABC have already tied up with Hulu.

Comcast’s trial program, which is supposed to start this month and which parallels plans being promoted throughout the cable industry, is in many ways a response to Hulu, which has unnerved the pay TV business. The industry is worried about the specter of “cable cutters” who dump their cable TV subscriptions and watch free Web TV instead. So it’s trying to convince subscribers that if they keep paying up, they’ll get to see whatever they want online, legally.

CBS, meanwhile, passed on the chance to join with Hulu early on, and has since been complaining that the joint venture’s business terms undermine broadcasters’ chances of making real money on the Web.

CBS and Comcast aren’t talking about what the economics of this tie-up look like, but given that it’s a trial, it’s likely there isn’t much to talk about yet. But ultimately, CBS imagines a world where cable companies pay it for the right to put its shows on the Web and where it can charge Internet advertisers the same rates it gets for on-air TV.

That’s a long way off, but this is a start. “This is about extending the economics of the television market to an already independent, healthy online market,” says CBS digital boss Quincy Smith.

UPDATE:  Comcast has a few more programmers on board. In addition to Scripps, A&E and Rainbow, which I’ve written about before, but which have not been formally announced, Comcast is bringing in BBC and MGM Impact, a VOD channel it runs with MGM.

Here’s the release.

CBS TO PARTICIPATE IN COMCAST’S ON DEMAND ONLINE 
NATIONWIDE TRIAL

As the First Broadcaster To Participate, CBS Agrees to Test Standards and Principles for
“TV Everywhere” Model

NEW YORK and PHILADELPHIA, July 14, 2009–CBS Corporation (NYSE:  CBS.A) and Comcast Corporation (Nasdaq: CMCSA, CMCSK) announced today that CBS is the first broadcast network to participate in Comcast’s technical trial of On Demand Online. The new service will significantly expand the number of top-rated TV shows available online and across platforms at no additional charge to Comcast’s cable customers while delivering increased advertising value to content owners. During the course of the trial, CBS plans to test various types of current and library content.

“CBS and Comcast share the same vision of giving consumers more–more content, in more places,” said Matt Bond, Executive Vice President of Content Acquisition, Comcast Cable. “On Demand Online is a major step in extending consumers’ television experiences online, and ultimately across platforms by giving any television network, including top brands like CBS, the ability to make their content available on the Web.”

“CBS is very supportive of initiatives that help extend our content to new platforms in such a way that we gain new audiences and additional value for our advertisers,” said Quincy Smith, Chief Executive Officer, CBS Interactive. “Comcast is already a trusted platform to distribute CBS content on air as well as on demand; expanding this relationship online is a logical step. In addition, CBS’s strategy has always been about open, non-exclusive distribution of our content in a consumer friendly way, which is a core tenant of TV Everywhere and On Demand Online.”

CBS’s participation in Comcast’s technical trial comes on the heels of last month’s joint announcement between Time Warner Inc. and Comcast which introduced a set of principles called “TV Everywhere.” Developed by the two companies, the principles are designed to serve as a framework to facilitate deployment of online television content in a way that is consumer friendly and pro-competitive.

Comcast will begin its technical trial of On Demand Online with approximately 5,000 customers from across the U.S. in the coming weeks–the first national trial of its kind. A major focus of the trial is to test Comcast’s new “authentication” technology, which will allow Comcast customers to receive the same content online for free that they subscribe to on TV. The service will utilize a simple log-on system for streaming content and, in the future, will allow for download content to go. The On Demand Online service will roll-out in phases, adding new features, functionality and content over time to provide consumers with a new way to watch television.

On Demand Online is part of Comcast’s Project Infinity, the company’s long-term vision to give customers an ever growing amount of video content on multiple platforms, whenever they want.

]]> http://mediamemo.allthingsd.com/20090714/now-things-get-interesting-cbs-joins-comcasts-web-tv-trial/feed/ 2 http://mediamemo.allthingsd.com/20090707/is-the-internet-ready-for-michael-jacksons-funeral/ http://mediamemo.allthingsd.com/20090707/is-the-internet-ready-for-michael-jacksons-funeral/#comments Tue, 07 Jul 2009 11:33:01 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=8998 Michael Jackson’s funeral service starts at 1 pm Eastern today and you will have to try very hard not to see it: In addition to wall-to-wall coverage on the news channels, any Web site capable of live-streaming the event will be doing so (list at bottom of this post). Is the Internet ready for the coming traffic jam?

I’m betting it is. Jackson was a global icon and his funeral will purportedly be a star-studded affair. But I just don’t think this will compare to the two events that have already tested the Web’s capacity this year alone: Barack Obama’s inauguration and news of Jackson’s death.

Recall that Obama’s first speech as president managed to get most people to stop using Google (GOOG)–voluntarily. And Jackson’s death was a news event that pretty much everyone wanted to hear more about, at least for a couple seconds.

But on the Web at least, Jackson was old news by last week. And my hunch is that anyone who truly wants to watch today’s event will do so on a TV.

But if do you want to watch it on your laptop, try one of these outlets:

TMZ (of course)

CNN.com (partnering with Facebook again, a la the Obama event).

E! Online

ABC News

Fox News

Hulu

MySpace

CBS News

Want to watch in the company of others? Cinedigm will be screening the event, for free, at the theater chain’s screens in 31 states. Details here.

]]> http://mediamemo.allthingsd.com/20090707/is-the-internet-ready-for-michael-jacksons-funeral/feed/ 0 http://mediamemo.allthingsd.com/20090706/is-veoh-the-next-video-site-to-go/ http://mediamemo.allthingsd.com/20090706/is-veoh-the-next-video-site-to-go/#comments Mon, 06 Jul 2009 10:00:53 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=8900 Now that Joost has given up the ghost and bailed out of the Web video portal business, who’s next?

A good bet: Veoh, one of the best-funded would-be YouTubes. Multiple sources tell me the company is aggressively marketing itself in hopes of finding a buyer.

And if a deal does go through, it will result in a loss for the company’s high-profile backers, who include former Disney (DIS) CEO Michael Eisner and Goldman Sachs (GS). I’m told that CEO Dmitry Shapiro has been shopping the company at prices below $70 million, which is the amount investors have sunk into the portal since 2005.

What happened to Veoh? The same thing that happened to almost every other Web video portal that isn’t Google’s (GOOG) YouTube or Hulu: Not enough audience, not enough ad revenue, too many costs.

Veoh claims an audience of about 25 million users, which is less than auditors like comScore (SCOR) report, and is, in any case, an order of magnitude smaller than YouTube’s. Sources tell me the company lost money on revenue of about $6 million last year. Sales are up and executives are optimistic it could break even this year, but the trajectory isn’t high enough to keep Veoh afloat as an independent company.

Complicating matters for Veoh is a costly court battle with Vivendi’s Universal Music Group, which accuses the company of copyright violations. That two-year-old fight has cost the start-up millions in legal fees.

The fact that Veoh’s backers include media-savvy players like Time Warner (TWX); former Viacom executives Tom Freston and Jonathan Dolgen; and Spark Capital, one of the primary investors in Twitter, hasn’t been enough to help the company extricate itself from the suit.

In April, Veoh laid off a good chunk of its staff, replaced CEO Steve Mitgang with Shapiro, the company’s founder, and focused its energy on a new “Video Compass” player that users are supposed to download and install in their Web browsers.

At the time, Shapiro said that the company’s Web portal business was a success but acknowledged that “quite frankly, there are a lot of things like that.”

So who would buy Veoh? Theoretically, at the right price, the company could be attractive to a large Web player like a Yahoo (YHOO), which used to be a big player in video back when video was a small market. Or the company could try marketing its technical expertise to a cable/telco company like Time Warner Cable (TWC) that hasn’t done much with online video but says it will soon.

But rival Web portal Joost tried making the same pitch to various buyers over the last few months and couldn’t get a deal done. Last week Joost laid off most of its staff and said it would try to go it alone as a services company.

This kind of flux is now par for the course among the big Web portals that thought they could rival YouTube, or at least secure second place. But Google’s lead over everyone else in video gets bigger every day, and its primary competitor is now Hulu, which has the advantage of premium content from its Hollywood owners–Disney, GE’s (GE) NBC Universal, and News Corp.’s (NWS) Fox.

In addition to Veoh and Joost, France’s DailyMotion has swapped out CEOs in recent months and is reportedly looking to raise money. Meanwhile, Metacafe, yet another video hub, has hired boutique investment bank Think Equity to look for “strategic investors to provide expansion capital.”

Metacafe CEO Erick Hachenburg says his company doesn’t need the money and can survive on its own if it doesn’t go ahead with a deal. “You would expect in this marketplace that you’re going to have a shakeout, and the stronger players are going to make it,” he says.

That sounds right. The question is whether we’ll have more than two players left when this is all over.

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