CBS's Web 2.0 strategy

March 7, 2008: 7:00 AM ET

By Jessi Hempel

A day before the launch of Moblogic.tv, a new Web series created by the team behind WallStrip, CBS Interactive president Quincy Smith and his band of Silicon Valley veterans had the media to lunch on Thursday at Black Rock. His goal: to try to explain the thinking behind a strategy that drew Web viewers to spend 104 million minutes on the site in December. Compare that to NBC's (GE) 62 million or ABC's (DIS) 28 million minutes.

This type of engagement is the golden sword for advertisers, but CBS and the other networks are a long way from figuring out how to capture it and turn it into money. Still, CBS Interactive (CBS) has a smart team or tech geeks on the job. This afternoon they wore ties (issued by CBS, joked a media exec), but Smith's team might be more comfortable in the standard Valley uniform of jeans and tennis shoes. They're fluent in engineer-speak, having come from pedigree tech companies.

They include Patrick Keane, who spent four and a half years at Google (GOOG) before becoming chief marketing officer at CBS interactive, and David Botkin, in charge of research and audience analytics, who came from eBay (EBAY). "We have little to no experience on the content creation side, but we have a ton of experience in terms of building online experiences around content," said former Yahoo Anthony Soohoo, who manages the entertainment communities and social media and came to CBS when Smith acquired the company he founded, Dotspotter, last October.

Their innovation strategy is very Web 2.0: rather than launching redesigns, they release new products and tweak existing elements of their online programming in a constant beta. For the past two-and-half months, they've been adding social networking features to the site. Soohoo gave a sneak peak of the features to be rolled out in the next six months. They include a watch list of programs viewers follow, a profile photo, opportunities for live chat, and video recommendations. "We're trying to enable the conversations to happen naturally without forcing users to think about the technology," said Soohoo.

Smith knows most of the audience won't be watching these programs on cbs.com, but on other sites like Youtube.com. That's why the company has put so much emphasis on building partnerships with networks from AOL (TWX) to Bebo to Facebook. They've opened an office in Silicon Valley and Smith says they get as many as 20 inquiries a day from sites that want to partner with them. So far they have 191 partners with 148 in queue.

These partners reveal an opportunity for CBS to grow its international business. Right now, 90% of CBS business is domestic, says Quincy. But among the online audience partners, 70% of viewers are international.

But in these partnerships, Smith is not losing sight of what he sees as CBS's most important asset. "The player is key…it's really important," he says of the high-quality video player that displays clips from new programs like Jericho, but also a deep archive of shows like "Twilight Zone" and "Star Trek."

There's incredible demand from advertisers, who are, in some cases, pay more right now to advertise against online content then against the shows on television. They are paying as much as $20 per thousand viewers.

Keane mapped out four ad models the site is experimenting with: they've launched "skins," or graphic frames that users can pull on to their profiles, and they have the ability to embed widgets with brand advertisements. They also offer brief ads before videos start and mid-video in longer programs. And they're experimenting with ads that display atop content while it is playing.

They're also sifting through data to identify connections in peoples' consumption patterns online and on the Web. The average age of the CBS primetime television viewer is 53; the online viewer is 38.

True cross-platform programming continues to be a goal not yet fully achieved by the network – or anyone else. Someone brought up the low audience rating logged by Quarterlife, a show that originated on the Web and was then launched on TV. Smith's brow furrowed as he made a point that underscores much of CBS's strategy: developing interactive programming for the Web is not about migrating shows to tv, he pointed out. It's about designing smart programming for a new type of medium.

Which brings us back to Moblogic.tv. Like its popular predecessor Wallstrip, it will only be found online. It's cheap to produce – less than $2,500 an episode on average. And Wallstrip has a dedicated audience of about 750,000 viewers a month. Tune in tomorrow to see just what it's all about.

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