Agencies Praise Quincy Smith’s Tough Stance on Hulu

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During his three years at the helm of CBS Interactive, Quincy Smith spearheaded some big projects, including the acquisitions of CNET and Last.fm for a total of $2.1 billion, the launch of TV.com, and the transformation of NCAA March Madness into a cross-platform success.

Yet when he leaves the company in January 2010, Smith may be remembered more for something he didn’t do. That something: play nice with Hulu.

Smith is leaving to start his own advisory firm, where he will continue to work with CBS as a client. Speaking with ClickZ Friday, he left the door open to a deal with Hulu, whose owners include CBS broadcast rivals News Corp., NBC Universal, and ABC/Disney. He said the clearest path to a CBS/Hulu relationship would be through the “TV Everywhere” initiatives being explored by cable companies such as Time Warner and Cablevision. Under those plans, cable providers would work with TV networks to assign online IDs to cable subscribers, who could then access broadcast shows on network sites and other video properties.

“If I can make it so that [a viewer] watches CSI on any screen at any time…and the advertiser is happy with the feedback, that’s the most elegant solution,” he said. “I can’t believe that Hulu would object. The question is, how do you get there?”

Meanwhile, CBS under Smith’s leadership continues to syndicate its programming freely to many online media players, including AOL, MSN, and Yahoo. Smith said over 50 percent of CBS’s video viewing and entertainment happens off CBS.com.

“You don’t create channel conflicts,” said Smith. “You own the rights through and through so you can make decisions unilaterally about where content goes.”

Smith’s decision to keep CBS an independent entity in the online video sphere was the right one from the standpoint of advertisers and agencies, many of whom dislike Hulu’s exclusive rights to broadcast shows from the other three broadcast nets.

“It was a potentially risky but very admirable move to go it on their own and develop their own distribution network,” said Adam Kasper, SVP and director of digital media at Havas-owned Media Contacts US.

However Kasper believes Smith’s strategy had a cost. “What I think they’ve missed is the buzz in the marketplace. Hulu was groundbreaking. Consumers and clients alike want to be associated with it.”

Smith is not unaware of the buzz factor. In recent months, according to another agency source, Smith has inquired with some big ad buyers about whether they feel CBS has hurt itself by withholding its content from Hulu. The answer, according to that source, was no.

“We didn’t think they had to be there,” said the source. “We continue to spend more with CBS directly than we do with Hulu.”

CBS is more than its television content. Its online media network includes CNET.com, food and lifestyle site Chow.com, NCAA.com, and Gamespot, among many others. In August, CBS Interactive ranked 12th among all Web properties in the U.S., with 52.8 million unique visitors, according to comScore data. That puts it ahead of top network rivals such as Disney Online (31.3 million uniques), NBC-owned iVillage (21.7 million), and NBC Universal (21.5 million). Smith says 90 percent of CBS Interactive’s revenue comes from non-video content such as online fantasy sports and tech reviews on CNET.

CBS hasn’t let its audience clout go to its head. Under Smith’s guidance, CBS Interactive’s sales force has built a reputation as a flexible partner to agencies, especially when it comes to binding television to online advertising. Chris Allen, director of video innovation for Starcom USA, noted that in 2008 the networks as a whole were very aggressive about platform integration. As a result of the weak online ad environment this year, and the relative strength of TV ads, some networks have eased off those promises. Not so CBS.

“We’ve had quite a few discussions with them about tying TV to online, even more than we’ve seen from the other networks,” Allen said. “CBS definitely was still talking cross-media.”

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