CBS CEO: Original Programs, Scheduling Key to Cutting SVOD Churn20 Sep, 2016 By: Erik Gruenwedel
Over-the-top video services are appealing for their loss-leader subscription prices and lack of mandatory long-term contracts. On the flipside, subs can terminate service any time with no penalty, which can drive up churn — a metric closely followed by Wall Street.
Since launching almost two years ago, CBS All Access and later Showtime OTT have each generated 1 million subs paying $5.99 and $10.99 monthly, respectively — tallies that exceeded market expectations.
“We surprised a lot of people,” CBS CEO Les Moonves told analysts Sept. 20 at Goldman Sachs Communacopia Broker Conference in New York.
To thwart the ease for subs ditching service, Moonves said CBS employs separate strategies fighting churn. It seeks to halt the percentage of All Access subs halting service through a slate of original programming like upcoming “Star Trek: Discovery,” “The Good Wife” spinoff and “Big Brother: Over the Top.”
“We will have a continual flow of original programming, and hopefully that reduces churn,” he said.
Showtime OTT bowed in July 2015 with CBS minimizing subscriber churn by focusing on an altered release schedule.
“As opposed to two new shows every quarter, there will a new program airing almost every month. It will keep the ball rolling,” Moonves said, adding he expects the 1 million subs on Showtime and All Access to become 4 million in “a few years,” reaching 8 million by 2020.
The executive said 65% of All Access subs use the service to catch-up on episodic content. A subset features the so-called “super fan,” a younger demo that watches every episode of “NCIS” and “Hawaii Five-O,” among others.
Another group (15% to 20%) consumes library fare, while 10% to 15% live-stream current shows on broadcast television.
Finally, when asked if All Access would soon stream NFL football, Moonves acknowledged streaming rights to Thursday Night Football had been available. Twitter ended up securing them for $1 million per game.
“It wasn’t [economically] viable for us to buy [the rights]. It wasn’t something to bid,” he said, adding the streaming rights to CBS Sunday NFL games still exist.
“I think that will eventually happen. Sooner than later,” Moonves said.