Hollywood's Dumbest Move Yet

Why are the nation's largest TV networks teasing viewers? In what might be their dumbest move yet, Walt Disney's (NYSE: DIS  ) ABC and CBS (NYSE: CBS  ) are among those giving limited access to some episodes of their most popular shows -- but mostly through their own websites.

Consider The Big Bang Theory. CBS has put online five full episodes of its geektastic comedy, ranked the 15th most popular show at TV.com as of this writing. Trouble is, you won't find these episodes at Hulu Plus, or Netflix (Nasdaq: NFLX  ) , or Amazon.com's (Nasdaq: AMZN  ) Instant Video service, or either of the show's fan pages at Facebook and Google's (Nasdaq: GOOG  ) YouTube. Nor can you download episodes from Apple's (Nasdaq: AAPL  ) iTunes Store.

Talk about stupid. Here's why:

Website

U.S. Alexa Rank

Global Alexa Rank

YouTube.com 4 3
Amazon.com 5 16
Netflix.com 21 94
Hulu.com 38 228
CBS.com 301 1,114

Source: Alexa.com.

When you're a TV network that makes the bulk of its money by pushing ads to a captive audience during a predefined schedule, there are only two reasons to put episodes online:

  1. To get more ad dollars from shows that have already aired.
  2. To hook new viewers.

How likely are new viewers to "discover" The Big Bang Theory if discovery means navigating to the CBS site? You don't need to be a theoretical physicist to know the answer. (Not very likely, for those of you scoring at home.)

Fishing in the right pond makes all the difference
By contrast, Amazon, Hulu, Netflix, and YouTube have built-in search and tagging systems that make it simple to find related content. They help us discover and try new shows. They get us hooked, to the point where we'll set up our DVR just to find the next live episode.

But don't tell this to CBS, ABC, and the other networks. They aren't interested in the free advertising. All they want is to sell. Here's a rundown of the top 10 TV shows at TV.com, along with details regarding where and what type of content you can find online:

Rank

Show

Network

Available Online?

Where to Get It

1 Game of Thrones HBO All episodes available. iPad, iPhone, HBO.com (subscription required).
2 Grey's Anatomy ABC All episodes available. Amazon Instant Video, iTunes, Hulu Plus.
3 House Fox All episodes available. Amazon Instant Video, iTunes (all seasons). Hulu Plus (season 7).
4 Doctor Who BBC All but the latest episode available. Amazon Instant Video, iTunes (all seasons). Netflix (seasons 1-5).
5 Bones Fox All episodes available. Amazon Instant Video, iTunes (all seasons). Netflix (seasons 1-5). Hulu Plus (season 6).
6 Supernatural The CW All episodes available. Amazon Instant Video, iTunes.
7 Criminal Minds CBS All episodes available. iTunes.
8 NCIS CBS Seasons 2-8 available. iTunes. (Amazon working through licensing issues.)
9 The Vampire Diaries The CW All episodes available. Amazon Instant Video, iTunes.
10 The Mentalist CBS No episodes available. Amazon working through licensing issues.

Source: Alexa.com.

Marketing so simple a small-f fool could do it
The good news is there are options for watching popular shows online. But if you're looking for something just off the margins or even a taste of a show you might want to try, you'll have to visit the network sites to get your fix. But even that's no guarantee -- the site for The Mentalist doesn't include episodes. For networks that purport to make their cash off marketing to viewers, this is a pretty stunning display of ineffective marketing.

My humble suggestions:

  • Make every episode shown free at a network site also free at Amazon, Hulu Plus, iTunes, and Netflix. (YouTube is only dealing in movie rentals at the moment.)
  • Work out a deal where freebies get special placement at these partner sites.

So what if there are still licensing issues to work out for The Big Bang Theory? Five episodes are online now and available for anyone to watch. A little technical work and ad-serving prowess should make them ready for most if not all of the streaming portals.

Don't let the horse and buggy pass you by, Hollywood ...
For the most part, movie studios have figured out how to use Amazon, iTunes, Netflix, and YouTube to their advantage. Teaser trailers. Sneak preview scenes. Related films released for cheap or even free. All of it helps build marketing buzz felt at the gate.

TV is episodic and a different beast. I know that. But it's also not so different as to excuse Hollywood's lack of creative marketing when it comes to using online distribution channels. In the cloud-computing era, investors can and should expect better.

But don't take my word for it. Click here to watch a free video that examines the links in the cloud computing value chain. You'll walk away with a richer understanding of how online access is changing everything, and creating opportunities for investors in the process.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple, Google, and Walt Disney at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Apple and Google. Motley Fool newsletter services have recommended buying shares of Apple, Netflix, Amazon.com, Walt Disney, and Google. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended buying puts in Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 31, 2011, at 11:53 AM, David369 wrote:

    I can understand the "thinking" at CBS. The head old frt says "Why put our shows on someone elses web site? We have our own web site, use it and make people see what else we have." He fails to realize that it is like the difference of having your product in the store window at a mall and having it in your store located in the bad part of town. In addition, people like me avoid places like CBS.com because of the delays involved since I don't exactly have the latest and fastest computer. The head old frt is probably very good at accounting and remembers something about marketing back when he got his MBA (in 1970's).

  • Report this Comment On May 31, 2011, at 3:57 PM, MikeVids wrote:

    Good move CBS... if you build it they will come... look at NFLX early numbers... they started out small and grew into a monster. At first your figures will be small but as long as you provide easy to search menus and decent quality streams... people will be satisfied and begin to visit your site. The real estate analogy above isn't really applicable because most sites are a google click away from being in prime real estate... Surely CBS can pay a kid to maximize their presence on the net. Otherwise they will become lost in the shuffle of NFLX programming and paid much less than their product is currently worth.

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