CBS Not Ready for Ad-Free 'All Access'12 Feb, 2016 By: Erik Gruenwedel
Since launching two years as an experiment to monetize old TV shows, $5.99 subscription streaming service CBS All Access has lived up to its name offering subs on-demand access to more than 7,500 program episodes — with lots of commercials — and live streaming in select markets.
CBS thinks so highly of All Access (and Showtime OTT) it aired pricey Super Bowl spots showcasing both platforms, which CEO Les Moonves says target younger demos, including the coveted broadband-only millennials.
“That’s where we’re seeing probably 60% of the viewership,” he said on the company's Feb. 11 fiscal call.
When asked whether CBS would considering melding the $4 in ad revenue it gets per pay-TV sub into a $9.99 ad-free plan, Moonves said the timing wasn’t right. CBS doesn’t disclose subscriber data for All Access. Hulu Plus offers an ad-free plan priced $4 above its $7.99 plan with commercials.
“Hulu ad-free service hasn’t worked that well yet,” the executive said. “We’re exploring [different pricing models]. We’ve contemplated doing a $9.99 service, but we’re not there yet.”
Moonves underscored All Access’ importance to CBS, saying plans to for a new “Star Trek” television series in 2017 on the service could have instead been licensed to Netflix, Amazon Prime Video and Hulu for a lot of money.
“But we said investment [in All Access] is much more important. [Streaming] is part of our future. A growing part. Next year, [All Access] is going to be a substantial financial benefit to us to have those sub numbers,” he said.
About 60% of All Access users use the service for catch-up viewing of past episodes of current seasons. The media company is considering using CBS Studios to create exclusive content for All Access.
“That’s a good promotion for the networks,” Moonves said, adding that no matter how consumers get content, CBS is going to be there. He said 85% of affiliates are on board with All Access, with a lone remaining TV ownership group likely joining by the end of the year.
“That’s a good promotion for the networks,” Moonves said.