CW to stop free streaming of ‘Gossip Girl’

OMG . . . tv is sooo retro.

In a strategic reversal, the CW television network said it would no longer offer free Internet streams of new episodes of “Gossip Girl” when the show returns to the air Monday.

Instead, CW wants young fans to watch the drama about privileged preppies the old school way -- on TV.

The move is designed to boost ratings for the program, which has developed a loyal online following but has failed to attract a sizable TV audience. The show’s average of 2.5 million viewers has not been enough to lift CW out of the ratings cellar or staunch its financial losses. CW is owned by CBS Corp. and Warner Bros.

The reversal underscores a dilemma facing traditional media companies. Revenue from online entertainment is meager compared with their core business of advertising-supported television. Some TV executives have questioned whether they are cannibalizing their audience, and revenue, by making popular programs ubiquitous on the Internet.

CW is desperate to increase its ratings, particularly now that it is preparing to sell advertising for the upcoming season. Ratings have slid more than 20% from last season.

“This is an experiment to see if we can help move the needle,” said Paul McGuire, a CW spokesman.

The flip comes despite the fact that “Gossip Girl” appeals to 18- to 34-year-olds who are comfortable watching entertainment online. The Internet is integral to the plot, which features an anonymous blogger who rats out the salacious private lives of the characters.

“Gossip Girl” is among the top shows downloaded from Apple Inc.’s iTunes store and has been among the most popular streams on CW’s site.

“This just shows that everyone is struggling with the model to see what is going to work on the Internet,” said Deana Myers, a television analyst at research firm SNL Kagan. “The Internet community is what has saved that show.”

Warner Bros., which produces “Gossip Girl,” will continue to make downloads available for sale on iTunes. CW plans to run the final five episodes of the season on Mondays and reruns on Sundays.

The network will try to serve the Internet audience by adding two-minute recaps and behind-the-scenes video nuggets on its website.

But analysts were perplexed by the move.

“The proverbial genie is out of the bottle,” said Tim Hanlon, executive vice president at Denuo, a unit of Publicis Groupe. “Television is less about the television these days and more about making video accessible on multiple touch points.”

Although CW might be taking a “myopic view,” Hanlon said, “it could be a noble experiment to see whether limiting the manner of distribution will increase the television ratings. But it could also annoy the audience.”

meg.james@latimes.com