Tuesday, April 25, 2006

CBS In The Mobile Video Business

April 25, 2006

Those that have followed Sirius and XM for any length of time are well aware of the intention of these services to get into the video business. Both companies have demonstrated video capabilities at the Consumer Electronics Show for the past three years, but as yet neither has delivered a video product to their subscribers.

Sirius and XM now seem to be much closer to implementing the video aspect of their business plans. Most now consider that Sirius and XM will both be rolling out video within the next nine months. The scope and pricing of the video roll out is still not known, but video on the go does seem to be a sector that is gaining traction.

Today Susan Kalla of Caris & Company, a widely known and quoted analyst, issued research notes on CBS Corporations venture into the sector through Verizon's V Cast service. Kalla notes in her piece:

"CBS began distributing news clips and celebrity alerts on Verizon (VZ, NR) Wireless for cell phones in late February for $.99 - $3.99 per month. CBS News is streaming video news segments produced exclusively for mobile phones on Verizon's V CAST service. We expect revenues of about $5 M in 2006. We assume popular programming from CBS and from Viacom, like Sponge Bob Square Pants will also migrate to the tiny screen. We attribute the slow rollout of programs to phones and the internet to difficulties in developing pricing models that optimize the revenue stream and maximize profits without cannibalizing the existing annuity base"

Obviously at this point CBS is acting as a content provider, and not the service which delivers the product. Understanding what CBS and Verizon are doing will better enable those following Sirius and XM to understand the costs of getting content. XM already has a relationship with CBS with the recent announcement of the syndication of the Opie and Anthony show. Sirius also has a relationship with CBS, but that one is currently in the court system of New York and centers around ex CBS employee Howard Stern.

The Kalla piece also talks about ABC and their recent agreements made with the guilds regarding this portable video concept often tagged as mobisodes.

You can get more information about Caris & Company here

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The link to this write up is http://tinyurl.com/z49kv

4/25/2006 11:41:00 AM

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