Executives speak at the CBS portion of the 2013 Winter TCA Tour. AFP/ Getty/ Frederick M. Brown
In the midst of a lawsuit with internet television broadcaster Aereo (which streams local content online in exchange for a monthly subscription) CBS invested in its rival Syncbak (which provides free, over-the-internet television to mobile devices) on Monday.
This move was prompted, no doubt, by the rejection, on April 1, by the U.S. Court of Appeals of CBS’ request for an injunction against Aereo, saying Aereo was distributing “unique copies” (through miniature antennas) of broadcast companies’ content, not “public performances”. So the investment in Syncbak shows that CBS is looking to have a stake in the streamed television business if it and the other broadcasters bringing suit fail to outlaw it. The buy-in is a hedge against its business model becoming irrelevant — a real possibility given the recent sector trends. Subscriber cable is gaining new subscribers, but at a significantly slower rate each year. Subscriber growth dropped 55% in 2012 compared to the previous year. While the number of zero-TV households is still low (5 million), it is growing at a fast rate of 150% in a five-year period since 2007. With the amount of quality content popping up on the internet (Netflix’s original programs such as House of Cards and Arrested Development and the next-day availability of popular television series such as Mad Men), the broadcast model will sooner or later become obsolete.
But the problem with this as a strategy is that CBS is not being aggressive enough in pursuing it. Dipping its toe in the TV internet industry is not going to cut it. And if there is a lesson to be learned from similar models (we’re looking at you, Hulu) it is that the twisted-arm approach does not work. CBS — or any other network looking to put content online - should do so with a commitment to see it succeed, not as a half-measure.
