Old Network Rivalries At Work -- In New Digital Spaces

by Wayne Friedman, Feb 19, 2009, 4:00 PM

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Future digital video destinations will be asking a pressing question: "Is it worth 10% of your advertising revenues to get more distribution?"

The owners of Hulu.com -- NBC Universal and News Corp. -- don't need the future to make that call. They don't think it is worth it. They believe their strong marketplace position is reason enough.

Because Hulu.com has been a wild success for partners NBC Universal and News Corp., it doesn't need outside destination deals to further its video footprint. Especially deals with would-be competitors.

In this case, CBS Corp.'s TV.com -- the Internet destination that came to the company in conjunction with its CNET acquisition. As a part of its agreement with TV.com, Hulu has decided to pull its content off TV.com, giving TV.com less network-type TV content to work with, not to mention the 10% of  advertising revenues that digital video syndicators typically receive.

This has been a point of differentiation for digital content:  Do you offer up content links to related digital destinations, which, in theory, makes your site more valuable, more of a video portal? A number of sites already do this. Or, do you restrict your content to a few players?

All this is in line with how the two parties currently feel about video on the Internet. CBS's head of digital, Quincy Smith, believes that syndicating content whenever possible is best. NBC/News Corp.'s Hulu has a different tack: to be more selective, mostly to big areas AOL, Yahoo and MSN.

On the surface, this would seemingly punish CBS. But this was expected. The deal with TV.com was made before CBS acquired CNET.  CBS declined to be a part of the Hulu destination.

TV.com actually has more unique visitors than Hulu. But Hulu is way ahead of TV.com in unique video views, something advertisers closely monitor.

Who has the better plan? This drama hasn't ended.

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0 comments on "Old Network Rivalries At Work -- In New Digital Spaces".

1. L.a. Peters from Audience Research Analysis
   

   commented on: February 19, 2009 at 7:09 p.m.

   So Hulu is a "wild success" for NBCU and News Corp. I wonder: Exactly what constitutes a "wild success" in the video portal world of today?

   Is it ad revenues? Ad revenues from agencies that don't quite understand what they're buying? Ad revenues based on crude audience measures? Based on how much hoopla is generated by the promotional machine?

   The only utility measures we have for Internet activity are still underdeveloped and unaccredited. "Wild success" is up for grabs.

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