In web spheres, the decision usually boils down to build vs. buy.
The term is build, because usually it involves technology. In light of today’s announcement that CBS was buying Wallstrip, a creator of online content targeted to the finance vertical, the argument that TV companies can simply create (or should create) programming for the Web both loses and gains some momentum. Scott Karp touches on this in his post. He’s not alone.
Despite the conventional wisdom, TV companies cannot simply put all of their content online, doing so is suicide as it risks to cannibalize their $250B offline revenue streams. We highlighted this in “Understanding TV execs angst and envy.” But not doing anything means a slow death, perhaps, like that seen today by print companies. The solution frankly was never to put all of the contents of a newspaper or magazine online, because even those who are aggressive like the Chronicle end up having to lay off 25% of their staff! In fact, if you look at the most stable newspapers and magazines, it is those who took a hybrid approach and bought online assets. NYT / About.com being one example.
In other words, on the one hand, by buying Wallstrip, CBS is saying that they do not really want to take all of their TV/Movie stuff and put it online. Don’t get me wrong, they have, will and continue to do so to varying degrees, especially under Quincy Smith who is very aggressive with putting things out there online and as manifested by the CBS Interactive Network, but it’s also a not-so-coy admission that they do need to have an online-only strategy for content creation.
And, when it comes to doing so, you cannot simply re-assign “Jim” - a 20 year veteran of TV - to online video. You need “Timmy.” The one who enters the online video battleground with no baggage. In CBS’s case, Timmy is Howard Lindzon.
Everything from format, distribution and revenue parameters is very different online than it is offline. So on the other hand, this shows that CBS will temper migrating its offline content library to the Web with online-only content to both benefit from the continuing shift of marketing dollars to the Web while preserving the premium that currently goes to TV content.
I certainly do not want to hide my bias, as a content producer, this is arguably the single best news for us, because it totally validates the value of our modus operandi, expertise in online video, our content library and our own syndication network.
This is something I posted last week when the rumor came up:
- WatchMojo.com is by far one of the largest content producers in terms of broadband platforms, with a library of 4,000 1 to 3 minute video clips. We have content on everything imaginable: fashion, food, video games, cars, sports, travel, and much more.
- WatchMojo.com has built one of the largest syndication networks of any online-only video producer: we’re one of the few online-only producers on Joost, as a few others I can’t name yet, even though they might be live. Last year we did over 1M streams on YouTube, this year we might do 10M. One syndication partner’s revenue grew 30,000% in 3 months, etc. If you line up all video portals, we’re on all of them, in 3, 6 or 9 months when people look at reach of video content throughout the Web’s leading video viewers/sites, trust me, we’ll be pretty darn close to 75% penetration if not more.
I’m not saying, at all, that is gives us an incentive to sell the company. I am - have been and probably always will - far more interested in building a stand alone company with revenues and dare I say it profits. Those matter in any business. But if you thought it took a lot of time to build technology instead of buying it, ask yourself if it will cost more money and time to create a library as exhaustive as ours in-house or simply acquire it.
Ultimately, it’s not what I think that matters, it’s the market, and in today’s deal, Howard Lindzon and CBS just gave us one helluva marketing push.
Subscribe: