• by Wayne Friedman , November 23, 2005

Two weeks ago CBS dipped its toe in the on-demand programming waters, and now it's looking to make a bigger splash.

On the heels of a report that CBS is in talks with Google for video search and on-demand video deals--and others including DirecTV for on-demand video--now comes word that CBS is also in talks about expanding its deal with Comcast. "We are talking with our affiliates right now," said a CBS spokesman.

On November 8, CBS and Comcast made a deal that enabled viewers to buy some CBS shows for 99 cents through Comcast's on-demand service. Those shows include commercials.

CBS' Chairman Les Moonves said CBS shows would be available only in those Comcast markets where CBS affiliates are owned by CBS Corp., and where Comcast systems existed. Moonves said there would be no affiliate station conflict, since he would only need to 'talk with myself'--which means dealing only with CBS affiliates owned by CBS Corp.

Conflicts can arise from deals made outside these markets. If CBS or Comcast sells advertising in CBS shows that run on a VOD service in markets where there are non-CBS-owned network affiliates, those station executives would complain that their exclusive agreements to air CBS programming would be in jeopardy.

In contrast to other networks which made similar on-demand programming moves, CBS appeared to be more cautious. Now, according to a CBS spokesman, the network is looking to open up as many distribution points as possible, with its traditional affiliates taking part in the discussions.

Media analysts have pointed out that few know which alternative network distribution model will win out. So all content providers, networks, and studios are looking to make as many varied on-demand deals as possible to distribute content.

The rash of big deals started some weeks ago when ABC said it would sell recently aired shows of "Desperate Housewives" and "Lost" for $1.99 through Apple's iTunes Music Store. NBC also announced a deal with DirecTV, in which viewers could buy NBC shows for 99 cents. But, in contrast to CBS' deal with Comcast, ABC and NBC wouldn't include commercials in its programming.

Viacom Inc. is splitting into two companies next year--CBS Corp. and Viacom. Financial analysts point out that CBS--described as the slower-growing part of Viacom Inc.--would need to find ways to accelerate revenue growth.

On-demand deals could become the foundation for those alternative revenue gains.