COO: CBS to be Part of 'Skinny Bundle' Movement31 Aug, 2016 By: Erik Gruenwedel
With DirecTV set to launch broadband-based service in the fall, and Hulu bowing a live TV platform in early 2017, notably absent from the rapidly evolving “skinny” bundle evolution is CBS. That stance is changing, COO Joseph Ianniello told an investor group recently.
The Tiffany network’s heretofore-cautious approach to alternative distribution and how its content is monetized outside the traditional broadcast ecosystem is why CBS programming has largely been absent from Hulu while in abundance on Netflix.
“We don’t care where you watch it or when you watch it — we want to get paid appropriately,” CEO Les Moonves told a media group last year.
Yet when Dish Network launched Sling TV in 2015 — the first so-called skinny bundle offering select pay-TV channels online only — CBS was not included in the standalone $20 platform
Instead, CBS has approached online distribution on its own with the rollout of $5.99 CBS All Access, ad-supported CBSN and $10.99 Showtime OTT.
All Access enables subscribers to watch CBS content on-demand, including complete back seasons of current and catalog shows. Ianniello told Nomura’s 2016 Media, Telecom and Internet confab in New York that for every 1 million subs All Access generates, CBS makes about $100 million in revenue.
“That has a lot of utility,” he said.
With All Access targeting broadband-only households and consumers moving away from pay-TV, Ianniello said the platform is attracting a younger audience used to on-demand (versus live) content and available on mobile devices.
“They watch twice as much content and they’re watching longer sessions. So, they’re really engaging with the content,” he said.
The executive said All Access should experience a defining moment next year when it becomes the exclusive home to “Star Trek: Discovery,” created by Bryan Fuller and Alex Kurtzman as a new chapter of the venerable sci-fi franchise.
“‘Star Trek’ will be a big ‘get’ for us. That’s a whole new set of subs we don’t even have as a base.”
Ianniello said that when considering over-the-top video, internal market research found a growing number of consumers dissatisfied with customer service and disconnect with traditional pay-TV. He said OTT is growing in popularity because it gives consumers control.
“You’ve gotta satisfy that appetite.”
With Disney recently acquiring minority interest (for $1 billion) in BAM Tech, a backend streaming video technology provider owned by Major League Baseball, the writing is on the wall where big media believes distribution is headed.
Ianniello said Disney’s investment spend in BAM Tech was “staggering,” yet underscored CBS’s ability to roll out All Access with in-house technology and also “expand margins.”
He said third parties are now coming to CBS looking to “white label” its technology required for OTT video.
“I’m looking at what we did … and it works.”
The executive said CBS would be part of broadband TV going forward, saying it is just a matter of “terms and conditions,” which include appropriate compensation for multichannel video program distributors such as cable, satellite and telecom.
“We’ve done a deal with Vue, so it’s not like we can’t do [skinny] deals.”
He added that online TV cannot simply migrate online a pay-TV experience consumers are increasingly moving away from.
“We want the technology to get out of the way so the consumer can interact with it. If we can enrich that experience, we think we have a fan for life.”