CBS’s television stations will begin providing local news clips to Yahoo this week in a precedent-setting partnership that gives the local broadcasters a bigger berth on the Internet and provides the Web company more video content.
Yahoo will sell ads linked to the 16 CBS-owned stations’ reports on a national basis and the companies will split the revenue, executives from the companies said. The spots, which will appear on Yahoo’s news pages for each station’s market, will play before the reports, and viewers won’t be able to skip them.
The arrangement, the first of its kind between a major station group and a major Internet search site, helps satisfy needs on both sides. Yahoo gets more video content that advertisers can feel comfortable being associated with, while the stations get a revenue injection and exposure to viewers who have defected to the Web.
“The future of our TV stations is severely threatened,” said Jonathan Leess, president and general manager of the CBS Television Stations Digital Media Group. “Media buyers and planners are shifting dollars from traditional media sources. We need to do the same.”
The CBS-Yahoo partnership will be an interesting test case for how TV stations adapt to the new world order, said Len Ostroff, CEO of online video ad provider Rovion and a former TV station executive with the Sinclair Broadcast Group. “Will the ad dollars associated with those stations be made up by video on the Internet?”
For Yahoo, which has been overshadowed in the Web video revolution by Internet competitors such as Google and MySpace, the deal is the first in a chain it hopes to strike with TV station groups. Yahoo was reported to be in talks to buy YouTube, the biggest video-sharing site, but lost out to Google last week. Google also beat out rivals for the rights to sell ads on MySpace back in August.
The CBS deal is also part of a push by Yahoo to build its news business. Yahoo News drew 35.7 million unique visitors in September, according to comScore numbers provided by Yahoo, outpacing MSNBC and CNN online.
Last month Yahoo served up 50 million videos across its sites from sources such as ABC News, CNN and Reuters, up from less than 4 million videos in September 2005, said Scott Moore, head of news and information for Yahoo Media Group.
“This is the first [deal] we have done for local,” he said. “We’re not finished yet. CBS is our anchor partner.” Yahoo is in active discussions with other station groups, he said.
Yahoo approached CBS more than six months ago about the partnership. The two players then spent the spring and summer developing mock-ups and hashing out the details. CBS wanted to ensure its stations would get prominent branding and placement, Mr. Leess said.
The CBS-owned stations already offer more than 10 hours of video on their own Web sites daily, including entire newscasts, individual segments and Web-only news reports. The station group has for the past few years used the so-called pre-roll advertising format that will be used in the Yahoo deal to build its Web business, he said.
The CBS videos will play on Yahoo, but will include links back to the CBS station sites.
Mr. Leess started CBS’s Always On initiative two years ago for the local stations, an effort that included revamping the station Web sites, adding at least four Web staffers per station, digitizing all video and offering stories and newscasts online and on mobile phones. The video on the sites has been well-regarded for ease of use.
As a result of the overhaul, the CBS-owned stations group has quadrupled both the number of video streams it provides and its online revenue since December. This year, the 16 CBS station sites will stream more than 50 million videos, Mr. Leess said.
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