CBS Considering Streaming Network, Showtime Programming7 Nov, 2012 By: Erik Gruenwedel
CBS Corp. is considering for the first time licensing past seasons of current TV shows and Showtime Networks serials to subscription video-on-demand services such as Netflix and Hulu Plus. The move marks a reversal of strategy by management that heretofore limited SVOD only to episodes of canceled CBS programs.
The rise in subscription video-on-demand and related time-shifted viewing of network content reflect significant changes in consumer behavior — in addition to revenue opportunities, CEO Les Moonves told analysts.
Speaking Nov. 7 during the CBS third-quarter fiscal call, Moonves reiterated the media company’s proactive strategy to mine non-advertising based broadcast retransmissions and SVOD and reach $1 billion incremental revenue by 2015.
Recent SVOD license deals include Hulu Plus and Netflix for The CW content streamed in Canada, Latin America, the United Kingdom, Ireland and Scandinavia.
Indeed, Time Warner said its 50% stake in The CW represented 40% of its Netflix license agreements.
“We’re taking advantage of all the new ways people want to consume our content all over the world,” Moonves said. “This a good thing for us. It means that more people are watching our programming in situations where there used to be scheduling conflicts.”
In addition to Netflix and Hulu, CBS is working with Amazon Prime Instant Video and other pending services.
Moonves has historically shied away from licensing content to SVOD that is still airing on the networks — preferring to syndicate catalog fare to other traditional distribution channels. With the rise in SVOD platforms willing to pay significant incremental revenue, prior caution apparently is being thrown to the wind.
“As you know, we have been very careful about this,” Moonves said. “We are now confident that streaming these shows can represent significant, incremental new high-margin revenue in 2013 and 2014, too. The sky’s the limit in terms of [content] availability and our ability to grow with Netflix.”
The CEO said the surge in time-shifted viewing also requires a bit of savvy when analyzing network ratings as the true value of a show initially can be misleading.
Moonves said DVR data compiled by Nielsen indicated CBS has 11 of the top-20 recorded TV shows currently on air. He said as many as 3 million to 4 million additional viewers record a typical CBS primetime show, with usage rates increasing 30% when extrapolated during a seven-day period.
“As we move forward, we will make it a priority to get paid for all of the viewing that is going on across all of our shows, including beyond the DVR,” the CEO said.
Separately, Moonves said TV ads for the upcoming Super Bowl broadcast on CBS are reaching $4 million for a 30-second spot.