Syncbak Gets Investment from CBS
Syncbak, a closely-held company that distributes participating TV stations’ signals online within their designated market area, sold a minority stake to CBS for an undisclosed amount, the companies said. CBS joins the NAB and CEA as investors in the company.
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Syncbak’s assurances to CBS that viewers who watch programming through Syncbak will be measured by Nielsen and counted toward ratings was a critical element of the deal, said Marty Franks, CBS executive vice president-planning, policy and government affairs. “I've had young entrepreneurs say to me over and over ‘We can get you more eyeballs,'” by putting programming online, Franks said in an interview. “But if Nielsen isn’t measuring it, those eyeballs don’t exist for us,” he said. “We wouldn’t be doing this if we didn’t have a high degree of confidence that any Syncbak viewing will be measured by Nielsen."
CBS and Syncbak have talked on and off for years, but the discussion did not get serious until early 2012, Franks said. “The explosion of tablets has changed a lot of people’s views about the viability of online transmission of the signal,” he said.
But challenges remain in terms of what programming stations are authorized to distribute online. “We don’t at the moment have an unfettered right to every single moment of our broadcast day,” Franks said. Though CBS produces much of its network programming, it acquires some shows, including sports. “Where programming comes from an outside supplier, we look forward to conversations that would make it possible for us to include those programs in such a service also,” he said.
Network-affiliated stations have more online rights restrictions than network-owned stations to the programming they carry, although stations are trying to negotiate for broader rights in affiliation agreements, said Kevin Goldberg, a broadcast lawyer at Fletcher Heald. He said CBS’s investment in Syncbak will open up more possibilities for the company to stream high-value programming. “CBS as a network will be able to clear more rights than local stations will, but it doesn’t solve the problem entirely,” he said.
The investment is a vote of confidence in Syncbak and its technology, said John Hane, a lawyer with Pillsbury Winthrop who represents Syncbak on some matters. “It’s an investment and not a lawsuit, so in my assessment that’s a big validation of the business and technical approach,” Hane said.
The investment should not be read as a reaction to Aereo, another company that’s putting TV station signals online but in a way that the networks view as illegal, Franks said. District and appeals courts in New York have not agreed with the broadcasters’ arguments against Aereo (CD April 17 p5). “We don’t like piracy and Syncbak would be a means of putting our signals online in a manner that is 100 percent legal,” he said. “We don’t feel Aereo meets that standard. But if this was a reaction to Aereo we would have called [Syncbak CEO] Jack Perry a month ago,” he said.