CBS to offer direct-to-consumer streaming service

CBS has joined the parade of content providers, networks, and over-the-top services hoping to take advantage of cable-cutting. 

CBS Corporation has launched CBS All Access, a new $5.99 per month digital subscription video on demand service that will offer current season and past season programming as well as classic shows on demand. The service will also stream local CBS television stations live in 14 of the largest U.S. markets at launch. Though Showtime is owned by CBS, All Access will not include Showtime content or live sporting events. 

Unlike HBO’s cord-cutting service announcement, CBS’s service will not be initially available via over-the-top streaming appliances such as Roku or connected gameboxes such as Xbox and PlayStation. The service will be available via CBS.com and on mobile devices through the CBS App for iOS and Android.

“Our focus is to develop the best cross-platform video experience possible,” said CBS Interactive President and CEO Jim Lanzone in a press release. “We want our audiences to be able to watch CBS’s industry-leading content live and on demand whenever and wherever they want.”

The move is a smart but risky one for CBS. In some ways, it protects the broadcast network from having to continually fight cable networks over fees paid in retransmission agreements. In 2013, CBS and Time Warner went to war over what the cable provider would pay the network for the rights to broadcast its content. Going directly to consumer would circumvent such disputes but flies in the face of a comment CBS CEO Les Moonves made in early 2014 when he said the company should expect $2 billion in retransmission fees by 2020. 

Currently, CBS is in a good position with cable TV operators, as it owns six of the top 10 shows in the Nielsen weekly ratings headed by NCIS, the top-rated non-sports weekly show. The decision to offer a cable/satellite-independent service, which would appeal to younger demographics, would complement its decidedly older broadcast audience. The gamble on CBS’s part is whether its shows have appeal to younger viewers, especially if the service does not include live sports or Showtime’s popular series such as Californication and Ray Donovan.

There is also the practical matter of existing access to network TV shows. For the vast majority of U.S. TV households, over-the-air networks such as CBS are available without cable or satellite service, and in high definition for most TV sets with digital tuners. With an inexpensive VCR or recording device to facilitate time-shifted viewing, that eliminates a lot of CBS All Access’s value save for classic TV shows such as Star Trek and Cheers (which first aired on NBC). 

In addition to likely announcements, which will include support for streaming devices, it would seem logical for CBS to make its content available for cloud TV services for Dish and Sony. The new direct-to-consumer service could be a venue for distribution of new content from such CBS Interactive properties as CNET (which used to have its own network), Gamespot, and Chow.com. CBS Sports, which owns the rights to college football games, the U.S. Open (tennis), the Masters (golf), and other sports through its CSSN subsidiary, could also be in a position to option streaming rights to that content.

Photos via C Jill Reed/Flickr (CC BY-SA 2.0) and CBS | Remix by Fernando Alfonso III

Allen Weiner

Allen Weiner

Allen Weiner has been a market research analyst in the area of new media and technology since 1994. He’s worked as writer, publisher and newspaper executive. He is the co-founder and publisher of Kombucha Network and the former managing vice president of Gartner.