CBS Sticks to Independent Web Strategy, and Agencies Cheer

Recent reports suggest premium video portal Hulu is on the verge of selling a stake to Disney-ABC Television Group and hosting Disney/ABC content on the site. If a deal happens, Hulu — already backed by NBCU and News Corp. — will be just one partner short of achieving a monopoly among broadcast giants. And that missing partner is CBS.

Yet a CBS alignment with Hulu would be undesirable to ad buyers, who could face higher prices and reduced creative control.

As Adam Kasper, SVP and director of digital media at Havas-owned Media Contacts US, put it, “I’d hate to see all major networks use the same destination as the main source of their impressions. It would just put an imbalance in the marketplace.” Other agency execs echoed the sentiment.

Therefore advertisers are encouraged that CBS Television is in no rush to work exclusively with any one online video player. Kasper and other agency execs say the network appears committed to a flexible approach, playing up its new community-driven portal at while talking with many possible partners. CBS’s commitment to has involved aggressive on-air promotion, including during the March Madness college basketball tournament.

Chris Allen, director of video innovation for Starcom USA, said CBS’s approach with is fundamentally different than that of Hulu.

“Hulu seems to be the lean-back experience,” he said. “ is taking the social approach — adding a lot of interactivity…It seems the two of them are positioning themselves to be direct competitors as aggregators. It could be interesting to see if there’s a fight for content.”

However Hulu and aren’t the only important players in the premium video landscape. YouTube has by far the largest audience among video destinations — boasting 89 million unique users to Hulu’s 9 million, according to Nielsen’s March figures. Lately the Google-owned site has intensified its efforts to license premium shows and feature films, with limited success. For now its bevy of broadcast quality programming is limited to short-form clips and older fare from CBS, Disney/ABC, and studio partners.

Meanwhile some less-discussed video services continue to win significant licensing deals. Two-year-old Joost recently won a flurry of international content, including Anime and comedy titles from Nippon TV and Dentsu, and German language programming from Diva and others. And Fancast, the Comcast-owned video portal, could still be a major contender — not so much for broadcast as for cable programming.

“If you’re a Disney or an NBC where you do have a stake in the cable space, you might be inclined to play nicely with [cable companies] in terms of distribution,” said Allen.

CBS has little to gain by rushing into an exclusive partnership, according to Forrester analyst Bobby Tulsiani.

“People may think they’re left out, but they are in somewhat of a position of strength,” he said. “They are the network in most demand on TV. If content is king, CBS will be in this game for a while.”

Tulsiani suggested exclusivity is unlikely to be the norm in the online video marketplace. Rather, he said cable and broadcast networks may soon embrace “smarter deals” where content owners deliver certain shows to sites based on the audience on those sites, rather than on the interests of the licensing partners.

“In the long run it’s not likely until the video market matures that you’ll see exclusives,” he said.

Anyway, if its investment in doesn’t produce the hoped-for digital revenues, CBS can at any time partner with YouTube. Media Contacts’ Kasper said that might be a wise option.

“CBS would have to be admitting to some extent that their plan wasn’t working as well as expected,” he said. “I think that would be a minor hiccup versus the upside it would offer.”

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