CBS, Google to Make Shows Available Online
Friday, January 6, 2006
CBS Corp. has entered into an agreement with Google Inc. to allow consumers to download some of its top prime-time shows and other programs from its library for viewing on a computer, a person familiar with the deal said yesterday.
The agreement, to be announced today at the International Consumer Electronics Show in Las Vegas, is CBS's first since splitting off this week from Viacom Inc. as a separately traded company. CBS and other networks have taken steps recently to increase revenue by selling their content for viewing online, on cell phones and on other mobile devices.
Consumers will pay a fee to download CBS programming -- revenue that will be shared by Google and the network, according to the source, who spoke on the condition of anonymity because the deal has not yet been announced.
Analysts said the deal may prove of only limited value in the short term but could have profound implications down the road. Robert Routh, a media analyst at Jefferies & Co., said few people will want to sit at a computer screen for the length of a typical television show. But in coming years, the Internet will link directly to the living room TV, boosting interest in online downloads and improving the viewing experience for consumers, he said.
"Short term, it's an interesting experiment and will probably not make a material contribution to revenue," Routh said. "Long term, 10 years down the road, we'll be in a different world. You could make the argument that CBS is taking a very futuristic, long-term view and being very early at changing the business model to maximize earnings potential."
For now, CBS and Google will have to assess what types of programming most appeal to online viewers. Routh believes that sitcoms and other shows that are usually enjoyed with a group would be less popular for the solitary viewer in front of the computer. But consumers already have shown eagerness for solitary viewing of movies -- consider the popularity of DVD players on airplanes and elsewhere, he said.
"It makes more sense for an HBO and Starz to have a partnership with a Google or Yahoo than for a broadcaster," Routh said. "But for a broadcaster to try it, they have nothing to lose."