May 3, 2018
CBS All Access and Showtime OTT, the over-the-top video platforms owned by CBS Corp., are approaching 5.3 million combined subscribers, CEO Less Moonves said on the May 3 fiscal call.
CBS All Access, which launched in 2014 for $5.99 featuring on-demand access to CBS primetime shows and catalog, and Showtime OTT ($10.99), which bowed in 2015, had a collective 5 million subs as of Feb.15. The services are projected to reach 8 million subs by 2020.
CBS plans to launch All Access in Australia by the end of the year, using recently acquired Network Ten to facilitate the rollout. All Access launched in Canada at the end of April.
“These international subs are incremental to our [8 million] target,” said Moonves, adding that more than two-thirds of OTT subs use the commercial-free option.
When asked if that statistic underscores the need to offer a premium-priced sports package without ads, COO Joe Ianniello said the data give CBS leverage when negotiating revenue contracts with distributors and content creators.
“We’re getting [consumers] used to consumption outside the home and on-demand with product that’s timely,” Ianniello said. “For news or sports or now entertainment news, and that’s going to be a subset of All Access.”
CBS markets All Access and Showtime OTT as bundles, with plans to incorporate the services with third-party platforms as well. All Access and Showtime OTT are also marketed Prime members on Amazon Channels.
“Some of the other streaming services that are bigger than us … [have] made a variety of deals,” Moonves said. “We’re also looking at them and we’re not averse to any ideas there.”
Meanwhile, entertainment revenue, which includes OTT sub fees, CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, Network Ten, CBS Interactive and CBS Films, topped $2.72 billion, up 16% from $2.35 billion in the previous-year period.
Operating income increased 22% to $492 million from $403 million last year.
Cable Networks revenue reached $609 million, up 12% from $543 million for the same prior-year period, benefiting from growth of ShowtimeOTT and the start of the renewal period for the licensing of Showtimeoriginal series.
Operating income of $230 million decreased 8% from $250 million, reflecting an increased investment in programming, including the launch of two new series, “The Chi”and “Our Cartoon President.”