CBS to Join Comcast's On Demand Trial
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CBS has joined forces with Comcast, signing on as the first broadcaster to participate in the cable provider's On Demand Online trial, which delivers free TV content on the Web to Comcast's subscribers.
The news of CBS' (NYSE: CBS) participation in the program closely follows yesterday's announcement that Comcast (NASDAQ: CMCSA) had expanded its partnership with Time Warner (NYSE: TWX) to include premium content from HBO and Cinemax to its on-demand experiment, which is headed for a national trial in the coming weeks.
Last month, Comcast and Time Warner broke ground on the arrangement with a set of principles billed as "TV Everywhere," a trial balloon asserting that cable subscribers who pay for television service should be able to access that same programming on any device of their choosing, at any time.
Comcast's On Demand Online program relies on an authentication technology with a log-in system for cable subscribers to verify their account and access streaming content. Comcast plans eventually to make the on-demand programming available for download.
The idea of porting the cable model to the Internet has some consumer advocates worried. One group, Public Knowledge, criticized the arrangement as a treat to the open nature of the Internet, describing Comcast's program as a "toll lane" on the Web that would put other distribution channels at a competitive disadvantage, while tethering consumers to cable subscriptions.
For media companies such as Time Warner, Comcast's plan offers a potential solution to the scary prospect of getting cut out of the revenue stream as consumers access more entertainment content online.
HBO and Cinemax are planning initially to put 750 hours of programming on the new broadband services each month, but said that that number would grow over time.
The library of content will include shows like "Entourage," "The Wire" and "Curb Your Enthusiasm," as well as Hollywood features such as "Transformers" and "Michael Clayton."
For CBS, which has already made a broad selection of its content available online through CBS Interactive, the deal could signify something of a hardening of positions in the migration of premium content to the Web. After all, among the four major broadcast networks, CBS is the lone hold-out from Hulu, the joint venture of NBC Universal and Fox, which has since added ABC to its roster of content providers.
CBS, initially something of a laggard in the digital era, has implemented what CEO Les Moonves has described as an "everywhere" strategy, seeding its content to hundreds of sites around the Web through licensing and revenue-sharing deals. The driving force behind that strategy has been Quincy Smith, whom CBS hired in November 2006 to head its interactive division.
"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," Smith said in a statement about the new deal announced today. "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 said it will begin the initial trial of On Demand Online in the coming weeks with a test audience of 5,000 subscribers.