News Articles

Q&A: Quincy Smith

New role to focus on authentication 10/28/2009 09:11:14 PM Eastern

CBS Interactive CEO Quincy Smith, a chief architect of CBS’ digital strategy, announced Oct. 28 he would be leaving the company at the end of the year to form his own consulting business. He will continue to work for the company as a paid advisor. (Related: Quincy Smith Leaving CBS Interactive to Form Consultancy)

Smith’s move comes at a time when content owners and distributors are still hashing out economic models for content online and CBS remains the sole broadcaster to have joined the TV Everywhere initiative spearheaded by Time Warner.

Smith joined CBS Interactive in 2006, and oversaw the acquisition and incorporation of CNET and the launch of TV.com, among other projects. In his new role, Smith will concentrate on monetization of video content, with a focus on authentication. He will also advise CBS on partnerships with technology companies to expand its online presence.

Smith spoke to B&C’s Alex Weprin about his new role at CBS, what the success of TV Everywhere depends on and more. An edited transcript of the interview follows.

What do you expect to be doing for CBS in your new role?

I spent an increasing amount of time looking at the Web as an IP delivery of video and that is where this gets more dicey. Is the TV business going to go the way of what the Web did to the telephone business? And how could it not?

I think TV Everywhere is, without putting all of our eggs in one basket, a fairly elegant solution, I think its execution is the biggest risk. It is so easy to say ‘It shouldn’t matter what screen Alex watches Ghost Whisperer on, and we thank you for doing that.’ What should matter is that you watch it and it is counted. You get the same ad counts and we get the same value on any screen.

Adding the Web as a platform is the same as adding distribution on Time Warner Cable or Comcast. But we all know that is really hard to pull off. You have got user behavior and how do you make authentication, which is a terrible word, it sounds all kinds of terrifying from a user perspective, so it is easy, a simple login. You cookie it once.

It has got to count, if some third party referee like Nielsen has got to come in and manage it. In some cases we are making strides that are above expectation. [Comcast’s] Brian Roberts said last week, as you know, at Web 2.0 [conference], that he is going to go live to everyone, 24 million households, as early as December, with the TV Everywhere authentication platform. If Time Warner cable moves, you could conceivably see a place where 40 million homes are up to speed on the ability for authentication by next summer.

But it has to count. Advertisers aren’t going to advertise unless it counts, and content people therefore aren’t going to put their content up online. That is not just a simple question of getting these guys to move, cause if they don’t move the other backlash is that, I am guessing, piracy could go through the roof, because users want it more than ever. And if you pull it back, or if you are in a position where you are not getting counted for in a good way and your reaction is to say let’s not do anything with it, that can’t be a good answer, because the users are going to find a way to watch it. This is real, concerted effort time on things like TV Everywhere.

TV Everywhere turns television into being about video. The online market for video right now is a $700 million business. Granted it is growing quickly, but it is often dealt with agencies and advertisers that buy Google adwords all day.

The question is, what is the $120 billion opportunity? How do you extend the TV platform online? That is where the massive opportunity is in trying to make this work.
So TV Everywhere is something you will be focusing on for CBS?

Yeah, and I think there is a lot more I can do outside of CBS on that particular issue than inside. CBS has clearly got the Kool-aid of it inside. We have always been adamant about saying yes. Streaming stuff for fans online is the right thing to do, but the question is, What is the business model to make it work?

How soon do you think TV Everywhere will realistically happen?

A couple of weeks ago I was asked a question and I gave what I think was a pretty serious knock on it where I said 2014 or something ridiculous like that, but I was using it to make a point: that it ain’t anytime soon. I think end of 2011 you start to see a  real business model evolve. [One] that is counted and measured, and therefore monetized.

The question is not whether TV Everywhere will be adopted. I think it is more ‘how successful will it be?’ That is completely determined on when it gets adopted. The success is directly linked to the speed at which we as an industry can get it up and working.

Why did you decide to start your own company?

In part, it is the ongoing relationship with CBS, and wanting to do more with CBS. I think some of the tasks that we have ahead of us in this constantly changing world are different. Some of them might actually be better accomplished by being out in the field as opposed to being in the dugout.

20 years ago in Silicon Valley, it was very well served by (investors with expertise and interest in technology) and now you just don’t have a concerted tech effort with real expertise and trust, and so I think there is a lot of opportunity. Don’t get me wrong, there are a lot of good individual bankers and large banks that have tech focus, but you really need a narrow, laser focus, in my opinion. Twenty years later you don’t really have that presence, so we are not serving the entrepreneur the way we should be.

At the same time as it relates to CBS, my first and obviously favorite client, the conversation has to be there more than ever. The communication and language gap is smaller, translation is less difficult, but partnerships really matter. CBS, as a great example, has great relationships with the likes of Facebook, Apple, Google, Twitter, Yahoo!, etc.

The questions are where do you want to take it, how do you make sure those relationships stay on and what do you do when you encounter new models, like the Netflix and Apple’s of the world, etc. Sometimes it is easier to help work them from both sides from sitting in a third party seat, as opposed to sitting on one side.

Will your new company be primarily talking to media companies? Tech companies? Both?

I hope both, and I hope it is a good balance of both. By the way, the tech analogy would be that often tech companies think about ROI, targetability and nomenclature that matches what a yellow pages business looks like online, but really it is reach and frequency. The opportunity of Twitter or Facebook is not just that it has massive targetability, but that it reaches X millions of people per month for a certain amount of time, and that starts to look like the Discovery Networks business. So what happens when real CMOs and brand advertiser really think about the Web that way?

When you are dealing with CBS, how much time will be dealing with CBS Interactive as opposed to Leslie [Moonves] and CBS corporate?

As you know, CBS Interactive is extremely well run by the likes of Neil Ashe and his team. It is a very different business than three years ago. Three years ago we were 140th, now we are a top 10 property and a top 5 in video. We spent a lot of time, effort and energy on it and I think it is extremely well-managed. My concern will be more on sideline growth distractions, with their help and partnerships, but I think the bulk of the work will be with CBS thinking about new things that the interactive world can touch. That is not to take away from Neil’s ability to see growth opportunities as well. We have always had a great relationship.

Do you think sites like TV.com and Hulu have a place in the TV Everywhere discussion?

Yeah…I think if you embrace the notion in a syndicated player, there is plenty of business to be done around that player. The backup is that when I was at Netscape the Web was first about browser, then Yahoo! changed it to be about sites. And now you have got it really compartmentalized. You have a widget for search, you have a widget for your Twitter, you have a widget for your friends, and you should have a widget that is your video player. As soon as you allow the syndication of that, and then making sure you can count it and engagement, the credit goes back to the content.

[The current online metrics system] is like putting out a research report or ratings the next day for Nielsen that say CSI did this on Time Warner, and this on Comcast. It is what CSI did, it is not what individual groups are, you have to be distinct, between aggregators, etc. We have a long way to go on this. Another way to say it, and probably a good area to focus on inside of CBS to help is, the irony is that the Web is infinitely quantifiable, the problem is that we don’t put it in terms yet that makes sense to other media that have the big deals, those are reach and frequency numbers.

Nielsen and CIMM are trying to merge the measurement for viewership online and on TV. Do you think it is a realistic possibility?

I think anything Nielsen is involved in has to be realistic, because they are big and carry a lot of very important weight on it. Ditto for CIMM. It is just good that they are paying attention. But they can never move fast enough.
 
Will you be based out of Silicon Valley or New York?

I am a nomadic guy. I would say logistically it will be everywhere, but I expect to have a strong presence in those places, if they will have me.

March