Web 2.0 Summit: Big Media Defiant Against Internet Threat

While pundits are quick to predict the Internet will drive a stake into the heart of big media, executives from CBS and Comcast this week were defiant against the threat, saying the Web is less of an enemy and more of an opportunity to expand their businesses.

During an onstage interview at the Web 2.0 Summit in San Francisco, Amy Banse, president of Comcast's interactive division, made it clear the largest cable company in the U.S. wasn't on the defensive. "You want me to be a dinosaur running scared, and I'm not," she told moderator Josh Quittner of Fortune magazine.

Banse and Quincy Smith, president of CBS's interactive unit, said the Internet presented many opportunities that their respective companies planned to exploit. For CBS, the Web presents a source of potential viewers. "We see the Internet first and foremost as new eyeballs for our content," he said.

Getting TV clips out to Web users through social networks like YouTube or Facebook brings additional viewers to the full-length shows, Smith said. "We have not found the Internet to be cannibalistic to television."

For example, a clip of a David Letterman interview with celebrity Paris Hilton on YouTube attracted 4.4 million viewers. CBS benefited from the exposure, even though the clip was posted by a YouTube user who goes by the name "Mangoface247," Smith said. Harnessing and taking advantage of that kind of attention is where the network is heading.

The Internet also gives CBS an avenue for increasing international syndication of its shows, Smith said. For example, offering full-length episodes of the former TV show Melrose Place over the Internet in Italy could build an audience that would enable CBS to sell the same show to an Italian cable operator. At that point, the network could switch to offering only clips on the Web to lure people to their cable TV.

Fully 90% of CBS's revenues are from the U.S., so the network sees the international market as largely untapped. "We think about the international market all the time," Smith said.

Comcast, on the other hand, sees the Internet as just one more pipe to bring video to cable subscribers, and believes the way to tackle the new source of content is to build one interface to access both. "I don't see it as a battle between cable and the Internet," Banse said. "I view it as how do I get out front and provide all of that."

Smith was particularly upbeat about social networks, which he compared to people who chat around the water cooler at work. "The Internet has thousands of water coolers," Smith said. "For a media company, you have to be involved in those conversations."

To do that, CBS needs to get content into the fabric of social networks through partnerships with these sites, Smith said. Becoming part of these networks also opens up new channels for advertisers.

Overall, the Internet represents expansion possibilities for old and new companies, Banse said. "The most significant thing is there's clearly a new media world evolving here," she said. "I don't know exactly where it's going, but it presents new opportunities for the new and the old."

On another issue, Banse defended Comcast's use of management technology, reported Friday by the Associated Press, to reduce the impact users of file-sharing networks, such as BitTorrent, eDonkey and Gnutella, have on overall traffic on the cable company's pipe. While these users make up a small percentage of Comcast's subscriber base, they account for a large majority of the traffic, Banse said.

"There is the hyperbole and the reality of what we call excessive use," Banse said. While 99.9% of Comcast customers get access to the Internet without interference, the 0.1% that fit into the category of excessive use have to be managed. "In the (course) of our management of that excessive use, we call the customers and offer them the commercial service," she said.