CBS Opens New Distribution Channels

Can't be left behind!
Vicissitude saves the day
At least, that's the plan

Enjoy the topical haiku, in honor of National Poetry Month.

It looks like CBS (NYSE: CBS  ) is serious about online content distribution. Yesterday, the company trumpeted the news about a boatload of new online video agreements that instantly made CBS' shows the most widely distributed out of all the television networks.

Remember when Google (Nasdaq: GOOG  ) bought YouTube? The same day, CBS -- and a few other networks -- signed pacts with both YouTube and Google Video. This round of deal-making puts that first step to shame. Rather than paying about $2 per CSI or Survivor episode through one of the existing partnerships, in a couple of weeks you'll be able to find the same materials for free through ad-supported channels like AOL Video, Brightcove, Sling Media, and eBay (NYSE: EBAY  ) offshoot Joost.

According to The Wall Street Journal's customary unnamed sources, CBS keeps 90% of the advertising revenue and hands over the remaining 10% to the distribution partner. The existing contracts should follow the newcomers into ad-supported, free viewing wonderland soon. CBS really does have some amazing breadth to its presentation with all of these partners in place.

Google and YouTube like the search-oriented approach, while AOL wants to weave the CBS clips into the fabric of its portal. Yahoo! (Nasdaq: YHOO  ) swings both ways. And then there's the odd-duck brigade -- Joost wants to take the place of your television set, or be the service that organizes your channels on the big screen. And Slingbox is all about mobility, letting you narrowcast your TV channels to other screens -- far, far away.

That diversity is intentional. "It's really all about the user," said Quincy Smith, president of CBS Interactive. "In building the CBS Interactive Audience Network, we are bringing our content to each unique platform of their choice. In remaining open to all online distributors and community builders -- big and small -- we can learn more about our existing audience, be exposed to new ones, and flexibly cater to their changing consumption habits."

Market intelligence with a side of ad revenues, please! It's a smart approach, akin to how Disney's (NYSE: DIS  ) ABC network wants to approach the wild, wild Web, according to network president Anne Sweeney. CBS is just a bit further along in implementing its plans.

And the partners are fine with occupying various niches for different customer segments, too. "This new, non-exclusive relationship extends AOL's position as a one-stop, online resource to find, watch and share millions of the best videos from across the Web, broadcast and cable television, and entertainment," AOL spokesperson Jay Esmerle told the Fool.

This is yet another way in which home entertainment is changing these days. The hardware is getting better, the content is coming at us from new angles, and the Internet is becoming an integral part of our daily lives -- whether we know that we're using it or not. It's all good for consumers. For the incumbent media giants, it's a case of "adapt or die," and CBS is doing its best chameleon impersonation today.

Further Foolishness:

Yahoo!, Walt Disney, and eBay are all selections of our Motley Fool Stock Advisor newsletter. Explore the Gardner brothers' entertainment keiretsu with a free 30-day trial subscription.

Fool contributor Anders Bylund is a Disney shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is always entertaining.


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