Online video will enable broadcast networks to develop a second revenue stream like their cable brethren enjoy, David Poltrack, chief research officer at CBS Corp. and president of CBS VISION, said yesterday at the Television Critics Association press tour.
Specifically, Poltrack was referring to authentication plans like TV Everywhere, in which premium content is placed behind a multichannel (cable, satellite, etc.) subscription wall. He lamented that broadcast networks like CBS miss out on current retransmission fees that the cable networks earn simply because the broadcast networks predate today’s TV distribution mechanisms. From Broadcasting & Cable’s coverage of Poltrack’s talk:
“If we started over, if we started the entire television business today, we would expect to be [compensated] for cable coverage,” Poltrack said. “What I call the ‘cable subsidy’ is every cable network gets paid whether a viewer watches or not. We are left out of that just because of the historic way it played out.”
He said the “opportunity online is to get our fair share on that authentication.”
Basically, Poltrack sees online video distributors being authorized to run CBS content for a per-subscriber fee. While Poltrack is high on the idea of authentication, he also recognizes that it’s a complicated issue and says the authentication process is “a theoretical exercise” right now.
CBS was the first broadcast network to sign on with Comcast’s OnDemand Online trial that kicked off last month. But getting a piece of that online subscription action isn’t the only way CBS sees itself making money from authentication. When we spoke with CBS Interactive President Quincy Smith last month, he said that with authentication will come more ads (you can’t skip through) with online video content.