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Moonves: How CBS Got Digital Religion

NEW YORK -- CBS, one of the founding fathers of the television era, hasn't generally been seen as a willing entrant into the world of new media. But listening to Leslie Moonves, the president and CEO of CBS Corp., describe the august network's recent rethinking of the digital proposition is something close to a spiritual awakening.

In an on-stage interview before an audience of digital marketers at the Interacting Advertising Bureau's Mixx conference, Moonves described what CBS has fashioned as its "everywhere" strategy. In essence, that approach is CBS' reckoning with the diffuse nature of the Internet, an acknowledgement that it's no longer practical to try to keep programming confined within the properties owned by the media company.

In that spirit, CBS has seeded its content to some 300 Web sites, most of which it does not own, through licensing and revenue-sharing deals.

"We welcome everybody anytime any place and we think it's where the future is," Moonves declared.

"It is a brave new world. And anybody who tries to define us by [saying] that's the only place you can receive their content, is going to be left behind."

For evidence of the extent to which consumers increasingly expect to find content anywhere, one need only look as far as the protests that met NBC's decision not to stream coverage of any events of the summer Olympics that it was broadcasting live on its television network. Then two weeks later, CBS offered live streaming of the men's U.S. Open tennis final, which it was also broadcasting on its network.

Moonves waved away the fear that freeing up content on the Web will erode a television audience.

"It is in no way cannibalistic, and it's additive. And that's why we're so excited about it," he said. "It's not counterintuitive to say that the Internet can help the network and vice versa."

Much of that synergy can be found in ad sales and cross-promotion through multiple platforms. A local car dealership trying to advertise on one of CBS' local radio stations will also buy ad space on that station's Web site, for instance. Then, too, CBS and other media companies are increasingly using their online properties to preview upcoming television programs. Moonves described the Web as something of an incubator for new shows, where the network can move away from focus groups and release a five-minute clip from a new series to gauge the audience reaction.

Exhibit A of CBS' newfound enthusiasm for the Web is of course the $1.8 billion purchase of CNET Networks, which closed in June.

As Moonves tells it, CBS had the choice of working to slowly and incrementally build out its own digital content, or take the plunge with the CNET acquisition to instantly become one of the top 10 Internet properties in terms of audience.

CNET brought to CBS a large advertising sales staff focused on the Web who have been working with the network's existing staff to integrate the ad operations of the two companies' properties, online and off.

But while the CNET acquisition has been the boldest and most visible of CBS' digital gambits, Moonves described it as more a culmination of a strategy that was set in motion in November 2006, when Quincy Smith took the reins of CBS Interactive. Moonves described the situation Smith stepped into as one where the network realized that it was lagging behind other media companies in the online realm, and that it needed to catch up quickly.

"We were looking at ways of how we could be part of what was going on," he said. "Any media company that doesn't acknowledge that the Internet is where you need to be -- that it's the fastest-growing, most innovative new place to get premium content -- is sort of out of the ballgame."