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Disintermediation: Direct to Consumer Video

LA Times report asks the loaded question, are portals passe? When the CBS network geared up to show the annual NCAA basketball tournament online for the first time in 2003, the television network didn't have the technological know-how to stream games itself. So it partnered with Web giant Yahoo Inc.

This spring, though, CBS went solo and delivered more than 19 million streams of live and archived games. Viacom Inc.'s CBS isn't alone in bypassing the so-called portals as it moves programming online. In the last month, ABC Television Group and Fox Broadcasting announced plans to make some shows available free on their websites. Cable networks including MTV and Bravo also have "broadband channels" featuring TV and Web-only shows.

Providing e-mail and search services and aggregating news, the portals "built huge audiences on the Web first," said Larry Kramer, president of CBS Digital Media. "Now we're in the process of building huge audiences on the Web around our content."

Analysts say online video distribution is still in its early days. The recent do-it-yourself trend may be a temporary shift as content owners experiment with new business and distribution models. Internet portals, they point out, are still winning deals, as evidenced by CBS' decision in March to create a site with Yahoo to put "60 Minutes" content online. CBS hopes the Web project attracts younger viewers to the show.

But some believe the role of portals � such as Yahoo, AOL, Google, MSN � in the growing market for video is less certain than it was only a few months ago. Moreover, the implications for broadband service providers that partnered with companies providing these web portals is even less certain.

TV networks are increasingly willing to skip the portals [and their broadband partners] as they set their digital strategies. With the exception of some promotional clips and news video, the networks are largely choosing to keep their shows offline, sell them as $1.99 downloads through Apple Computer Inc.'s iTunes store or stream them on the networks' own websites.

Yahoo executives cautioned against counting them out. They said they are talking to networks about deals to drive more traffic to the broadcasters' online programming -- perhaps enabled by giving away the Yahoo Go TV (Meedio) software to conumers for free. Clearly, we haven't heard the end of this storyline.

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