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Sumner Redstone’s Master Strategy with YouTube

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

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?

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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.

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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?

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