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CBS Joins Cable On Demand Online Trial

14 Jul, 2009 By: Erik Gruenwedel

CBS Corp. July 14 said it would become the first broadcast network to include its primetime programming in Comcast Communications’ On Demand Online national trial.

The test is part of “TV Everywhere,” an ambitious strategy co-opted by Comcast and Time Warner Inc. that allows consumers to view repurposed content for free on the Web, cable and portable devices, provided they are monthly subscribers.

The strategy is viewed in part as an antidote to Hulu, the widely hyped online site co-owned by News Corp., NBC Universal and The Walt Disney Co., that repurposes TV shows in an ad-supported format.

During the course of the trial, CBS, which also owns repurposed content site TV.com, plans to test various types of current and library content.

“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, CEO 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.”

Comcast and Time Warner earlier this week announced that upwards of 750 hours of programming from HBO and Cinemax, both owned by Time Warner, would be made available online for free at Comcast.net and Fancast.com. Comcast On Demand Online programming already includes content from Time Warner’s TNT and TBS networks, and it struck a separate deal with Liberty Media Corp.’s Starz last week.

Comcast will begin its technical trial of On Demand Online with about 5,000 customers nationally. A major focus 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 a major step in extending consumers’ TV 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,” said Matt Bond, EVP of content acquisition with Comcast.

Executives at News Corp. and CBS contend Hulu and TV.com offer an alternative to the current syndication business model that has been hit hard by advertising declines in local TV markets.

Indeed, Disney CEO Bob Iger, in analyst calls, has criticized the “TV Everywhere” concept for its exclusionary stance, even characterizing it as anti-consumer.

Independent analyst Rob Enderle said “TV Everywhere” could easily be considered an anti-Hulu strategic move. He said Hulu clearly endangers cable companies with its advanced technology and HD option that could motivate viewers to shun cable for TV consumption.
“With this move, cable could become relevant again, and, because the revenue path is more certain and understood, studios would be more willing to free up rights and allow them to have the kind of access [to content] that Hulu is still struggling to get,” Enderle said.

The analyst said “TV Everywhere” is potentially a more lucrative model than Hulu due to the existent subscriber base for cable.

“Everyone is focused on sales and profits like a laser at the moment,” Enderle said.

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