Wednesday, December 18, 2013

Free Idea: Digital Dollars @CBS

Les Moonves, CEO of CBS, has been quoted that he's not interested in trading "analog dollars for digital dimes" and that's why a lot of CBS content can't be found online in strictly legal channels.

He likes the money he receives from advertising as well as any fees that are received from cable and satellite companies for retransmission.  (I don't know if CBS receives money for CBS, but as part of the Viacom family, it's integral in negotiating new deals with cable companies - when they ask the cable company to add Teen Nick-at-Nite Classics en Espanol 3 and the cable company doesn't want to and so Viacom yanks CBS.)

But he can't figure out how to make money with videos online. The advertising rates are much smaller, the audience is much smaller, compared to the Neilsen ratings. (That's the small group of people who track their viewing habits - the ones who control whether your favorite shows live or die.)

At the same time, there's a company in New York called Aereo that's come up with a novel idea. They've got tiny little antennas (about the size of a dime) that pick up broadcast signals. You can "rent" their antenna and the video is delivered to you via the internet. They're marketing to people who want to receive broadcast channels but can't put up an antenna or who can't put the antenna in the right place to receive the channels they want. No, you can't subscribe unless you live where you could theoretically receive the broadcast channels. Since each person is assigned their own antenna, Aereo says they're legit. CBS and others are suing claiming illegal retransmission (over the internet). They also include a DVR offering.

So, my question for CBS is... why not just offer this on your own site for $2-3 a month? Keep all the commercials in place, offer a DVR service, only allow them for a certain period of time (yeah, I'm almost describing Hulu, aren't I?). But it becomes additive to the overall ratings. There are plenty of people who would sign up who probably don't necessarily get counted right now.  I can think of quite a few:

- cable cutters - people like us who've canceled cable but still want to watch some CBS shows. They're not on Hulu or Netflix or Amazon. They're not difficult to find online anyhow, but now CBS isn't getting anything. No ad revenue, no subscription revenue.

- adversely situated - my parents used to receive 9-10 broadcast channels until the digital broadcast switchover in 2009. Now they get one relatively clearly and two very faint. They subscribe to high-speed internet but would never pay for cable TV.

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