CBS’s portfolio of video distribution deals shows that CBS Interactive’s president, Quincy Smith, is still using his head.
Quincy, you may remember, then at Allen & Co, was one of the investment bankers who sold YouTube to Google. Before that, he was the IR man at Netscape and a Valley venture capitalist–so he knows smart Internet ideas when he sees them. And CBS, you may remember, was one of the first major TV production firms to embrace (or at least experiment with) online video distribution through non-CBS properties.
CBS didn’t participate in the DOA bigmediavideo YouTube killer occasionally known as NBCFoxTube (although it will reportedly distribute video through it). It didn’t alienate the entire digital industry by suing YouTube for $1 billion (instead, it did a small partnership). And, now, intelligently, by doing distribution deals with anyone and everyone BUT YouTube, it is establishing precedent and leverage for the inevitable major YouTube negotiation.
According to Brooks Barnes in the WSJ, in its video deals, CBS is also retaining full control over the sale of advertising that will be shown in conjunction with its videos–a big sticking point for traditional media companies, who value their relationships with advertisers. It is also demanding 90% of the advertising revenue, with only 10% going to the distribution partner. For the distribution partners’ sake, one hopes this is "net revenue", as the streaming costs alone will probably eat at least 10% of the top line.
Most importantly, CBS is doing everything it can to diversify its distribution channels, attract a loyal base of online users, and make its content ubiquitous–all of which will allow it to credibly maintain to the folks at YouTube that it–CBS–can take or leave a full-blown YouTube deal. Whether this is in fact true is a different question, but CBS is doing everything it can to make it seem so.
The quarterback behind these intelligent CBS machinations, I suspect, is Quincy Smith. So give that man (and CBS) a hand!
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