Leaked Email: Quincy Smith Of CBS Wants To Counter "Reckless Hulu Streams"

There is no love lost between CBS and Hulu. You won’t find any full episodes of CBS shows on Hulu, and CBS’s own site TV.com is so similar in look and feel that one might call it a product of envy. So it should come as no surprise that the knives are still out for Hulu at CBS Interactive.

An email with an article critical of Hulu from CBS Interactive CEO Quincy Smith that was passed around internally (excerpted below) landed in our inbox. Smith confirms that the email is real. Earlier today, he passed along an article from Contentinople titled “Execs Rip Hulu for Giving Away Content” which quotes media executives on a panel laying into Hulu for giving away TV shows for free. The panelists in the article also praise the cable industry’s proposed TV Everywhere model which will make TV shows and movies available online only to consumers who are already existing cable TV subscribers and can be authenticated as such.

Smith passed along the entire article to his executive team, along with a note wondering “how hard it would be to prove that some ratings declines are a result of reckless hulu streams.” CBS’s ratings for the Fall Season premiers have been doing relatively well, compared to other networks. The implication Smith seems to be making here is that maybe the other networks are down because their audience is going online. If he could prove that, it would make his strategy of shunning Hulu look smart.

But he then writes that “Authentication is a nice option.” And his SVP Anthony Soohoo later chimes in: “Authentication will play a huge role in 2010.” Hulu itself may add subscription and pay-per-view options to its service, according to Ruport Murdoch. Smith also mentions some “findings” that support “packing more ads” in online videos.

So what can we conclude from all this? CBS will either be more conservative with its full streams online, or pack them with more ads. Maybe that is what the findings are all about, that online audiences will tolerate more ads for quality content. It is certainly easier to put more ads in online videos than to try to put up an authentication wall (which is really just a pay wall by another name).

Here is the email except (the only thing I didn’t include is the full text of the Contentinople article which you can read at the link above).

From: Soohoo, Anthony
Subject: FW: hulu pricing
Date: September 24, 2009 8:26:44 AM PDT

fyi. Authentication will play a huge role in 2010.
From: Smith, Quincy
Sent: Thursday, September 24, 2009 8:23 AM
To: Soohoo, Anthony; Ashe, Neil; Lurie, Zander; Marquez, Michael; Cain, Sarah
Subject: hulu pricing

Nice way to put it.
We should think about how hard it would be to prove that some ratings
declines are a result of reckless hulu streams and that Authentication
is a nice option
We should also think about if we want to talk the walk on packing more
ads and our findings thus far.

Execs Rip Hulu for Giving Away Content . . .