Business

Subscriptions to the CBS All Access and Showtime over-the-top (OTT) streaming services continued to soar in CBS’s third quarter (ended Sept. 30) and those and the company’s other growth initiatives, including “skinny bundles,” are expected to generate more than $4 billion this year, up 75% from 2015, according to CBS president and acting CEO Joseph Ianniello.

“Going forward, as we continue to position CBS as a global multi-platform premium content company, we are confident that there is significant upside from here,” he said on an earnings call Nov. 1. “Whether it’s large traditional bundles, smaller streaming packages, or standalone direct-to-consumer services, we are distributing our content in all the ways consumers want it and reaping the benefits,” he told analysts.

Based on the continued strong results for CBS All Access and Showtime OTT, CBS is “more confident than ever that we can achieve our new goal of 8 million subs combined from these services in 2019, a full year ahead of our original schedule,” he said.

The company was “in the midst of our biggest year yet in Showtime OTT signups as we continue to reach new and younger viewers by expanding on to new distribution services,” he noted. But he didn’t provide specific OTT subscription numbers for the two services in the quarter.

CBS continues to produce shows just for CBS All Access, including an expansion of the “Star Trek” franchise, CBS Creative Officer David Nevins said on the call. “Star Trek: Discovery” had success globally and season 2 will launch Jan. 17, he said. CBS will also add a new separate “Star Trek” scripted series starring Patrick Stewart, who will reprise his role as Captain Jean-Luc Picard from “Star Trek: The Next Generation,” Nevins told analysts. Also planned is a new “Star Trek” adult animated series, “Lower Decks,” which he said will air on CBS All Access with a “two-year pickup.” He added: “We expect to have more ‘Star Trek’ announcements coming shortly.”

CBS All Access Canada was “off to a solid start, and we continue to expand into new markets,” Ianniello pointed out, adding that in the current quarter (Q4), CBS is launching an Australian version called 10 All Access. That new platform will include local programming for Network 10, in addition to “premium CBS content, further distinguishing us from other leading” subscription video on demand (SVOD) platforms, he said.  CBS “will continue to expand into new territories in 2019, and we are confident that digital distribution on a global scale will be very lucrative for CBS,” he told analysts.

CBS, meanwhile, is also expanding its “marquee brands on to ad-supported OTT platforms, led by the success” of CBSN, its digital news network, he said. Helped by the “24/7 news cycle and our increasing political coverage, CBSN is now averaging more than 1 million streams per day,” he noted. Another positive sign: the average age of the CBSN viewer is 38, “decades younger than the average broadcast and cable news viewer,” he pointed out. The company continues to expand CBSN onto the services of multichannel video programming distributors, including a deal CBS recently announced to provide it as a standalone channel to all Hulu Live TV services, he said.

Later this quarter, CBS will start “the next phase by launching local versions of CBSN, featuring content from our owned and operated stations across the country,” he said, adding that will start with CBSN New York, and then move on to the addition of other markets, including Los Angeles, in early 2019.

CBS Sports HQ, the company’s sports OTT service, “continues to grow as we feed the demand for more sports highlights, around-the-clock coverage, stats and analysis,” he also said. Streams were up 25% from where CBS was with CBSN in the same time frame after its launch, he noted.

This is also the first full season in which viewers can watch CBS National Football League (NFL) coverage on all mobile devices, including on CBS All Access, and “we are monetizing that viewing,” he said. Also, during Q3, CBS “locked in a deal” for the Professional Golfers’ Association (PGA) Championship, extending it to 2030 and “securing our position as the broadcast leader in golf,” noting the new pact also includes “expanded digital rights across all CBS platforms.”

CBS also just launched the ET Live consumer service, featuring its “Entertainment Tonight” TV property, Ianniello pointed out, but didn’t provide any initial usage numbers or viewer feedback.

CBS also started using “advanced data and technology both to deliver a higher” return on investment (ROI) for advertisers and “to monetize our audiences more effectively,” Ianniello said. “To that end, we are rolling out a proprietary new platform,” short for Data and Audience, he noted. DnA enables advertisers to buy specific audience segments, “so our advertisers can target people who like to eat out and drive SUVs rather than just buy the broad demographic of adults between the ages of 25 and 54,” he explained.

“At the same time, we are also aggressively pursuing partnerships in set-top boxes and smart TVs to sell highly targeted addressable ads,” Ianniello said. “And we are using the data we collect from our direct relationship with the viewers on our OTT platforms to optimize our dynamic ad insertion capability. So, as consumer habits change and technology advances, we are finding new ways to monetize our audiences and it’s becoming more valuable all the time.”