Is 83-year-old media-mogul Sumner Redstone the crypt keeper of a dying behemoth being dragged into the 21st century kicking and screaming (and suing), or a shrewd old man making would-be Web partners dance his hokey-pokey?
The answer appears to be both.
Two days after Sumner's Viacom Inc. announced that it was suing YouTube to the tune of $1 billion (go ahead and put your pinky to the corner of your mouth like Dr. Evil) for "massive intentional copyright infringement," Sumner's CBS Corp. announced a deal to launch CBS Sports NCAA Tournament Channel on YouTube.
The channel is sponsored by Pontiac and will feature NCAA tournament game clips and highlights in near realtime. The site will also show postgame press conferences and other tournament video. As part of the deal, YouTube will encourage users to vote on their favorite "Game Changing Performances" at NCAASports.com and the top vote-earning team will be announced live on CBS during halftime of the championship game on Monday, April 2. The winning team's school will receive a $100,000 general scholarship from Pontiac, but not a Pontiac (Can you say 1981 Turbo Trans Am? Vroom, vroom!).
While the prospect of watching Coach K explain Duke's early exit from the March Madness over and over again is indeed appealing, the deal does make you wonder if old Sumner has gone off his meds.
Ok, ok, I get it; this may be a brilliant carrot-and-stick ploy by the $7.7 billion-dollar-man to lure potential Web partners into working in his content-control paradigm at the same time that he spanks them like misbehaving great grandchildren.
But I wonder if this geezer isn't cutting off his nose to spite his face with this lawsuit.
Since Viacom and CBS split last year, CBS Chief Executive Officer Leslie Moonves has embraced the Web and YouTube, on which it began posting clips of its popular programs in October--a month before Google gobbled it up.
"CBS under Moonves has become a full-fledged, vertically integrated old and new media company," Porter Bibb, managing partner at Mediatech Capital Partners told Bloomberg. "He's been very aggressive in just about every phase of the business, particularly taking a lead in trying to make the transition to digital."
Meanwhile, Viacom, owner of Comedy Central, MTV and Spike, has been slower to generate Web revenues, reports Bloomberg. They also are clearly trying to take a bite out of YouTube's market. The company redesigned its Ifilm.com Web site to incorporate user-made videos with clips of its own shows and reached a deal with file-sharing startup (and unproven) Joost.com--a move that gives it a great deal of control over content.
While CBS embraces the control consumers have in the Web 2.0 reality and forms profitable partnerships around it, Viacom appears to be desperately clutching to the old-world corporate control-and-command model for growing its Web interests.
So is Sumner pursuing the right strategy here? Can he have a foot in the past and his walker in the future?
Related Stories: | Topics:Management, media, CBS Corporation, YouTube LLC, Viacom Inc., Science and Technology, Technology |
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Recent Comments | 4 Total
March 17, 2007 at 6:58pm by Dubby
Are you crazy? CBS is doing better than Viacom online? Viacom will generate $500M in online revenues this year. What will CBS generate?
Moonves has generated some buzz--on stupid deals. He's the laughingstock of the digital media community. A 60 Minutes deal on Yahoo (ask anyone in the industry if they want to replicate that rev share or ad sales terms). A weak promotional deal on Google (and the $ deal appears to have fallen apart). But I suppose you are buying the joint Google press release that says how well Letterman has done since showing up on YouTube?
Where's the Sling deal he promised at CES?
Profitable Partnerships? Name one CONTENT company that's "made it big" through these kinds of partnerships.
CBS bought CSTV. They launched the uberlame Innertube (never hear those video stats). They cut a Google marketing deal (and didn't get paid for their content). End of story.
How about you guys do some work before writing? Or does FC think blogs are a place to make dumb conclusions without any support.
March 19, 2007 at 12:18pm by Alex
Thanks for your post, Dubby. Allow me to retort.
Viacom hopes to generate $500 million in online sales revenues this year. Hopes.
But to do so they've been reduced to wooing advertisers with karaoke renditions of Justin Timberlake hits. And since today the New York Times reports that they invested $1 billion buying up Web sites that complement (or competed with?) the 44 domestic sites that MTV Networks (Viacom) runs, they're probably going to need to dip into JT's N*Sync library next year to even come close to breaking even on those investments.
So there's that.
Viacom has been adamant about maintaining its own relationship with advertisers, in part because it is trying to sell ads across platforms, using the popularity of its Web properties to bolster its television ad revenue, reports the Times. That is leverage the company would lose if it cannot draw enough viewers to its own Web properties.
But…
While Google streamed 1.167 billion videos for viewing by 54.7 million people in January, Viacom Digital streamed 264 million for just over one third of the number of people, or 18.9 million, making it the fifth most popular online video company, according to data from comScore sited in the Times. Five hole is getting pretty close to the bottom of the line-up, Dubby.
I'll be interested to see if Viacom can generate the $500 million in revenue this year sitting in that five spot. But because of a flawed strategy, if they don't get there, they'll also take a hit on the side of their business they have supposedly mastered--Cable television entertainment.
And if they do make it work…well, I'll raise a glass of Ensure to Sumner and Co.
Meanwhile, CBS--true, far from perfect when it comes to Web integration--is making strides operating under a different model, which was simply the point of the post, Dubby.
Old-school media giants such as Viacom and CBS aren't set up to become full-fledged Web companies. Period. They can either invest huge sums and play catch-up (Viacom) or adjust to the new platform and maximize revenues based on existing investments and partnerships (CBS).
According to BuzzMachine.com's Jeff Jarvis (via Sunday's Chicago Tribune), Betsy Morgan of CBSNews.com said at the recent Online Publishers Association meeting that CBS News takes down infringing clips when they're posted on YouTube and replaces them with officially sanctioned clips. "That's smart," Jarvis wrote. "I guess when Viacom and CBS split up, CBS got the IQ."
Those clips drive viewers back to CBS' core sites (as opposed to the 44 Viacom has floating around the Web), boosting their prospects for succeeding on the Web 2.0
Back to my Friday post. We see that CBS has leveraged its (significant) investment in the NCAA men's basketball tournament by partnering with Pontiac (who is also in with the NCAA) and YouTube to post legal clips on YouTube thus driving traffic back to CBS Sports and NCAAsports.com (which links to CBS).
And--surprise--a Merrill Lynch report cited by the Tribune notes that CBS' ad-supported live Internet streaming of NCAA games on its own sites was likely to double last year's revenue haul of around $5 million. How many of those viewers came through YouTube--directly or indirectly--may be nebulous at this point, but the numbers are good and I'm sure that's all Moonves cares about.
The jury is still out on the Web strategies of Sumner's Viacom and CBS properties, but what is evident, Dubby, is that in the Web 2.0 world there may not be a single ledger line for how a company profits from its Web strategy.
The Los Angeles Times said it well in an Op-Ed that appeared Sunday:
"Today, YouTube makes some movie and television executives uncomfortable, but it makes many others drool with excitement. It's become the easiest and cheapest way to reach a global audience. Do you have a show or a commercial that you want to try out? Put it on YouTube and let the global free market decide whether it's any good. Do you have a successful show? Put your outtakes up on YouTube and make it a phenomenon.
Chevrolet last year used YouTube to enable a successful user-generated advertising contest for the Tahoe SUV. Marc Shmuger, chairman of Universal Pictures, said earlier this year that for each new movie, the studio sends out studio-approved graphics, clips, sound effects and music videos to YouTube in hopes they will be shared and generate buzz. How else to explain that while Viacom is suing Google, CBS and others are busy negotiating and signing distribution deals? "I think that the marketing side … and the copyright-protection side have contradictory impulses," Shmuger said."
And the New York Post has an interesting perspective today on Viacom's Web strategy, one that is not pretty much what I was trying to get at on Friday:
"The biggest risk Viacom faces in its $1 billion copyright infringement lawsuit against YouTube isn't financial or legal - it's cultural.
The lawsuit makes MTV parent Viacom appear more like a Luddite than a company that has its finger on the pulse of youth culture. And with YouTube, MySpace and others sites replacing MTV as the arbiters of cool, it can ill afford to further alienate its core audience."
But it appears it's too late for that, Dubby. Luckily for Viacom you're still on board.
March 21, 2007 at 5:34pm by Ryan
Rebuttal, Dubby?
March 25, 2007 at 4:30pm by Mary
Viacom's harasment of You Tube is much ado about nothing...It seems to me Viacom has more to gain than to lose