News Corp. (NWS) is reportedly interested in purchasing the Travel Channel from Discovery (DISCA) for something like $800 million. Here’s one way to help pay for a small piece of that deal: Sell off its Fuel TV cable channel.
Murdoch and company are mulling a sale of the “action sports” cable channel, prompted by inbound requests, industry sources tell me. No comment from News Corp., which owns this Web site.
If News Corp. does part with the channel, it won’t be a whopper of a deal: Fuel TV, which features skate and surf-themed programming like “The Adventures of Danny and the Dingo” (I know. Me either) boasts just 25 million subscribers–about half of what cable networks need to get taken seriously by operators and advertisers.
Just as telling, perhaps: I’ve queried three different Wall Street analysts to get a ball park price for the network, and none had a clue–and only one had heard of Fuel at all.
So here, for everyone’s edification, is some Fuel TV programming: Danny and the Dingo’s (who are snowboarding stars, apparently most recent hijinx.
You get a lot of video streams. Close to 10 million, says YouTube, which says Sunday’s live Webcast of U2’s Rose Bowl concert was the single largest event it has streamed so far.
Granted, Google’s (GOOG) video site only started streaming live events last year, and doesn’t do it very often. But this is was a pretty good muscle-flexing event, and by all accounts it went pretty well — I read some gripes about the site limiting transfer speeds, but many more raves about the quality of picture and sound.
That 10 million number, spread out over 2+ hours, doesn’t really tell us how many people watched the concert, or how many did so concurrently. YouTube’s first attempt at live streaming, its weird “YouTube Live” concert/award show, may have attracted a peak audience of 700,000.
For some context, consider that last week’s episode of “The Mentalist” on CBS (CBS) drew 11.8 million viewers, which made it the 20th-ranked show in the US. But the fact that YouTube is even playing in those leagues gives you a sense of the site’s reach.
And recall that YouTube boasted this month that it is now streaming more than 1 billion streams per day, which means that the overwhelming majority of its users were watching something other than Bono and company on Sunday.
You can see an amazingly high quality version of the concert here, though it isn’t embeddable. But here’s a clip of a fake U2 concert from a couple of years ago.
Quincy Smith has finally announced that he’s sort-of leaving CBS, but will stay on as an advisor on its Web video strategy. So it seems like a good time for him to explain just what CBS’s Web video strategy is.
The short version is that unlike its broadcast peers, CBS (CBS) has been reluctant to make many of its shows available on the Web, because it worries that doing so cuts into its core TV business.
So while GE’s NBC Universal (GE) and News. Corp.’s Fox (NWS) put Hulu together, CBS stayed away. And when Disney (DIS) decided to join the joint venture earlier this year, CBS executives argued strenuously against the deal. Instead, CBS has been content to use the Web as a promotional tool for TV via outlets like Google’s YouTube (GOOG).
The longer version is below, via a transcription of a brief chat I had with Smith this afternoon to discuss his plans and the network’s. This is stuff he’s talked about before — to reporters, in industry forums, and even via emails he wishes he didn’t write — but Im running it at length here.
Because 1) I think Smith does a good job of explaining the push-and-pull of Web viewership vs. Web economcis that everyone in big media is grappling with and 2) I want people to see just how difficult it is to keep up when Smith talks: He can get out a lot of words in a relatively short time.
I also had a quick chat with CBS CEO Les Moonves, who made many of the points Smith did, but with less verbiage: I’ll get you that transcript shortly, too.
Peter Kafka: Since you’re going to be advising CBS’s Web video strategy, why don’t you lay out, for the record, where things stand?
We recognize that the Web is two things. It’s both a new medium… and there my example has always been, look at fantasy football: When you’re nice enough to watch the Jets just pound the snot out of the Raiders on Sunday, on a CBS channel.. on fantasy football on CBSSports.com, you start on the Tuesday before and end the Wednesday after.
And what are you doing? You’re personalizing it, you’re becoming more of a fan of the game [he goes onto praise CBBSports.com's feature set]. All of those things are additive, so when Sunday comes in, you’re actually more of a fan, and you’ve even more convinced you’re going to watch that broadcast show.
Now, I realize that sports is reasonably bullet-proof, and a good case study to begin with versus some of the other programming, but the fact is the Web is a new medium. So what do I also mean? Tech reviews on CNET, Money Watch being watched on BNET. Gamespot video game reviews.
Access to content that CBS didn’t already have, that are additive — both in their own right online, with the margins that the CNET business is used to, and where we’re getting just stronger and stronger from a margin perspective — and potential content that can also be applied to our [local TV stations owned by CBS], our affiliates, our broadcast news, as well as the radio. So that’s the side of our business that is $600 million revenue and $50 million-plus profit on the bottom line.
The other side of the Web, the side that is most thought of by many journalists, is the threat, of an IP-deliverer of video. And how you turn that threat into an opportunity.
And so from that perspective, as you know, we didn’t go ahead and say, “OK, we’re going to lock down and stream, with all of our other peers in broadcast, and come up with the same rules, and embed and right-click this and go away.” I’ve never had a beef with Hulu. Hulu’s always worked as a great service. That’s part of the problem.
As a network, we need to make sure that our content is being seen where the dollars matter. And right now that’s on air. Opportunities like TV Everywhere — we’re not putting all of our eggs in that basket, though we are big advocates of it — are ones where you can actually take and expand and extend the television market online, so it doesn’t matter what screen you watch CSI on: What matters is that you watched it, it counts and you saw the ads.
But until that happens, it’s crazy to just stream the shows for zero economics. When in fact you can make a lot more money doing things that are additive and complimentary to the rest of the CBS line. That’s where CBS interactive comes in now.
Kafka: But TV viewers are showing an increasing interest in watch their programs on the Web — whether its from legal services like the Web or illegal torrents and pirate sites. Don’t you need to reach them where they are?
Now, if you really look at those numbers, what they’ll say is [online and offline video are] both growing, right? We’re having the best year ever as America’s largest broadcast network. and I think that 99.9 percent of that — this is quote i’ve never been able to get in there — is that’s [because] of the great content that we have. There’s some infinitesimal basis point that’s relevant [to CBS ratings because] we are making sure that when people watch it, they’re more inclined to watch it on television. For now.
Once that solution moves, once those economics move – whether that’s more ads, [higher] cpms, more ad buyers… You and i can say all day long, “we’re sold out on web video. That’s going really well. It’s sold out.” Well, no kidding it’s sold out. It’s a $700 million market. The television market is $120 billion. And of that $700 million, half of those [byers] are spending 90 percent of their time doing Google keywords, not buying online video.
The key is, how do you turn television buyers into video buyers. and that where is solution like TV EVerywhere come into play. And by the way, looking at [Hulu CEO Jason] Kilar’s comments the other day, in Colorado [at an industry convention], he sees that too. He’s more sophisticated on this stuff than most anybody. from the perspective of, he understands thats where the big dollars are. And so he probably went at it as, “I’m going to aggregate all the people first, so hopefully things like TV everywhere come to us.” From our perspective at CBS, we’ve got to go to them.
I don’t hate Hulu. Hulu’s world class video viewing. What I don’t understand is, why license all that content to something that works that well, that seamlessly, yet, without the economic model around it?