CBS Is Giving Hulu a Brief Kiss, Not a Bear Hug

Tuning In: Media Cos. Know 'Windows' Help Their Bottom Line

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Some people will say CBS is finally falling for Hulu, but they'll be missing the point.

CBS has long remained aloof while other purveyors of broadcast-network television aligned themselves with Hulu, the sleekly designed video-sharing site that makes such vaunted programs as "Saturday Night Live" and "Grey 's Anatomy" available for consumption via video stream. Yet early this morning, the most-watched TV network in the U.S. said it was taking part (along with a host of other big U.S. content kings) in a new subscription-only service Hulu had set up for Japan's web surfers.

Rather than confusing this for a sign that CBS might embrace Hulu more wholeheartedly, observers should read this development as another pitch for the practice of "windowing," or making very specific deals for the distribution of select types of content based on the content's position in its life cycle.

In the U.S., for instance, CBS doesn't want new episodes of "Hawaii Five-0" or "The Good Wife" on Hulu because it might undermine the shows' ratings and ad support on traditional TV.

And even as it joins Hulu's pay service in Japan, the Tiffany Network is only turning over older content -- episodes from past seasons of its current shows and libraries of older series at which audiences might not otherwise glance.

That's right, no current episodes of CBS series are slated to appear on Hulu Japan -- just as they're left out of CBS's deals with video-streaming services run by Netflix or Amazon. In addition to protecting advertising and ratings , CBS is trying to protect demand for its programs in syndication. Older series -- no longer on the air or already sold into syndication deals -- are in a better window for streaming.

This micromanaging of content is aimed at bringing in the most revenue for every series CBS (and oftentimes, sister network CW) puts on the air. If couch potatoes have fewer ways to find "NCIS" or "Undercover Boss" during their current runs, they're (hopefully) bound to either watch the network when the shows are on, DVR the programs, or stream them via VOD. By doing what it can to boost traditional TV ratings , subsequently managing availability of current episodes online, then drumming up revenue for older programs that would sit and gather dust if they weren't being streamed to what are likely smaller fan bases, CBS can -- at least for now -- claim to be scrubbing the various distribution pipes for whatever dollars they generate.

CBS's strategy is in some part driven by necessity. CBS needs to buoy the power of TV because its media interests are not nearly as diversified as those of NBC Universal, Fox parent News Corp. or ABC parent Walt Disney.

But other media corporations are managing windows more deliberately as well, sometimes to Hulu's detriment. News Corp.'s Fox announced in July that it would delay online distribution of fresh episodes of favorites such as "House" or "Fringe" by eight days unless web viewers proved they subscribe to Hulu's pay service in the U.S. or a participating pay-TV service. Web surfers who liked watching last night's new "Fringe" on Hulu's free service -- with fewer commercials than TV -- were suddenly out of luck.

At a time when TV's traditional means of generating money -- gathering big audiences on its own schedule -- is being splintered, no corporation investing millions in celebrity actors, lavish sets and glitzy publicity can afford to give anything away for free, no matter how much goodwill it may generate in the process.

Whether the current strategy has legs depends on whatever technology manifests itself over the next several years. For now, however, CBS is just shaking hands with Hulu overseas, not jumping into bed with the glitzy media entity. There's nothing foggy about the windows that will let Japanese consumers -- or others -- view the company's programs over the next little while.

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Tuning In is an ongoing series of commentaries by Ad Age TV Editor Brian Steinberg on the TV schedule, the ads it carries and changes within the industry. Follow him on Twitter.

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