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CBS Expands All Access OTT Streaming Service to Include Kids’ Content

CBS All Access continues to grow on the subscriber and content fronts, according to Joseph Ianniello, CBS president and acting CEO, who disclosed his company’s plan to add kids’ content to its over-the-top (OTT) streaming service.

“We are broadening our reach to add kids’ programming to All Access,” he said Aug. 8 on an earnings call for the company’s second quarter (ended June 30). “Later this year, All Access will begin rolling out 1,000 episodes of library programming and new original seasons of ‘Danger Mouse’ and ‘Cloudy with a Chance of Meatballs,’ so now our subscribers’ children will have premium content to watch too,” he told analysts.

CBS “delivered double-digit revenue growth” in Q2 compared to a year ago, “with solid increases across all three key revenue types,” as advertising grew 7%, content licensing increased  12% and subscription fees jumped 13%, “fueled by growth” in retransmission fees and reverse compensation, as well as increases in its direct-to-consumer streaming services CBS All Access and Showtime OTT, he said.

Total CBS revenue grew 10% to $3.8 billion, while profit increased to $440 million ($1.17 a share) from $400 million ($1.05 a share).

Revenue growth was “driven by our investment in premium content, which we continue to accelerate,” according to Ianniello. “Every decision we make is designed to build upon our position as a global multi-platform premium content company,” he told analysts.

CBS is now producing 89 TV shows, up from 70 a year ago, he said, noting that’s a 27% increase.

“As we create more and more content, we are monetizing its value using a two-pronged approach,” he said, explaining: “The first approach is to produce more shows for our own platforms, particularly our direct-to-consumer services. This investment helped drive a 75 percent increase in total OTT subs from last year’s second quarter, representing an acceleration over the sub growth we posted in Q1. And the second approach we are using to monetize the value of our content is to take advantage of an increasingly lucrative licensing marketplace.”

Noting that CBS has “become one of the most prolific content producers in the business” with TV series that include “Dead to Me” on Netflix, he said: “By increasing the amount of programming we’re creating for our own content brands while also selling our shows to third parties, we are operating at a sweet spot in the industry and setting ourselves up for continued long-term growth.”

CBS All Access features an expanding slate of programming that includes 12,000 hours of content that can be streamed to “virtually all devices,” he went on to say, noting the “vast majority” of All Access viewers are 18 to 49 years old. “As All Access consumption increases, we are reaching younger consumers all the time,” he said, adding: “Another good data point we’ve seen is time spent on All Access, which is up over 60 percent and growing even faster than total streams and it’s mostly as a result of adding more original series.”

Meanwhile, the company’s CBSN 24/7 streaming news service is now “averaging more than 1 million streams per day” and the median age of viewers is 37 years old, he said. The company is also “ramping up our investment in direct to consumer by launching new local versions of our digital news network, CBSN,” he pointed out, noting it “already successfully launched in New York and Los Angeles, and, by early next year, we plan to have local versions of CBSN in all 13 major markets where we have news operations.” That “will enable us to have a more robust multiplatform approach by the time the next election cycle really gets going, so we can fully capitalize on what we expect will be a record year for political spending,” he said.

As with CBS All Access, the company’s “programming investment is driving significant growth on our Showtime OTT platform,” he also said, telling analysts: “Showtime OTT is proving to be attractive to the growing number of broadband only households, which are often younger viewers as well. And, like All Access, Showtime subscribers are also viewing more and more content over the top, with time spent up approximately 30 percent this year.”