While the time-wasting effects of the Final Four may be inflated, surely all this online activity means a mint for the sites’ proprietor, CBS?
The company is expanding its Internet presence, with investments in sports properties like those above and with a $1.8 billion acquisition of tech portal CNet Networks in May 2008. CBS’s interactive division now runs Web sites from foodie property Chow to geek paradise Startrek.com. It’s a tangle of niche audiences, each taking a slice of online traffic by stealth, with little CBS trace.
CBS is now a solid No. 2 player in many online realms, but while it’s growing its library of offerings, it doesn’t control the game-changing means of production. Its niche-picking feels more like an assembly of tactics rather than a full-blown strategy.
The CBS acquisition of CNET seemed dollars long and years late at the time.
It was a respected player in technology news and reviews, but the 10-figure amount (paying a 45 percent premium over CNET’s stock value) seemed pretty dear for a company better known for its underused but potentially useful URLs (news.com, TV.com, even com.com) than for its online time-sucking potential.
Meanwhile Fox’s acquisition of a majority stake in MySpace three years earlier for less than one-third of the cost came with an initial audience of 22 million, growing at 2 million a month, all served up on a platter for Rupert Murdoch’s edification.
Now, the acquisition is returning a profit (the unit as a whole turned an operating profit of $28.7 million on revenues of $186.3 million in the last quarter of 2008 after incurring a loss in 2007) and has moved CBS Interactive up to second place in total page views among major media sites (CBS’s 53.5 million visitors in January 2009 was dwarfed by the Fox empire’s 90.5 million users but puts it ahead of media rivals New York Times, Disney/ABC/ESPN, Time Warner, and NBC).
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So CBS has turned its ambitions to a different community—TV fans—and has tried to build it up with some pretty attractive exclusive content (as opposed to some of the detritus on MySpace).
Once merely a fan site to discuss shows, CBS is now pumping TV.com, one of the CNET prizes, with shows produced by Sony, MGM, PBS, Endemol (the Dutch reality show pioneer responsible for Big Brother), and Manga Entertainment (the purveyors of that manga classic Astro Boy), as well as streaming content from its own Showtime and CBS television stations.
CBS Interactive President Neil Ashe, the former CNET CEO, told The Big Money that 98 percent of TV.com content is contributed by users via chat room discussions and popularity polls. (But don’t expect those fans to be remixing or repurposing TV.com videos; this is still a corporate Web site, and Web 3.0 work techniques aren’t yet welcome.)
The problem is that TV.com can’t simply act as CBS’s online TV arm. Sanctioned online video is subject to a hodgepodge of agreements and permissions; networks may own some shows outright but buy others from independent producers.
Sure, five of the top 10 TV shows on the air last week were CBS fare (as were five of the top seven non-“reality TV” shows). But of these, only full episodes from the CSI detective procedural series are available on TV.com; you’ll have to settle for short clips from CBS TV-broadcast detective procedurals Criminal Minds (Nielsen’s No. 6 show) and The Mentalist (Nielsen’s No. 7 show).
And the online streaming marketplace is extremely crowded. Hulu.com, the Fox/NBC-owned partnership, has some of the same constraints (no full episodes of NBC’s Law & Order here) but has got some its own ideas around building traffic. It has been more aggressive in seeking partnerships with other portals, such as AOL, Comcast, Yahoo, MSN, and MySpace.
Just this week, Hulu announced its own social networking hub, Hulu Friends, taking on TV.com on its own turf. Last month it pulled content it had shared with TV.com. And it’s investing heavily in TV ads, with the Alec Baldwin spot aired during the Super Bowl being the most deliciously malevolent in a while. What does CBS make of Hulu’s foray into mainstream advertising? “They can spend a billion dollars, and their brand name is still not as big as the brand of ‘TV,’ ” said Ashe.