DirecTV Now finally signs deal for CBS and Showtime

DirecTV Now is up to 500,000 subscribers.(CBS Corp.)

AT&T finally secured the last major missing programming piece for its virtual MVPD service, DirecTV Now, announcing a deal with CBS Corp.

The agreement adds livestreaming capability for 14 CBS-owned and operated stations, bringing live and on-demand programming from the CBS Television Network to DirecTV Now users in New York, Los Angeles, Chicago and other major markets. The deal also includes The CW. Affiliate deals for both networks are pending.

Showtime will now be offered as an on-demand service for an additional $8 a month. 

DirecTV Now users will also have access to CBS cable channels including CBS Sports and Pop.

Terms of the deal were not disclosed. 

DirecTV Now’s most popular tier, a $35-a-month base package featuring more than 60 channels, already functions with a fairly narrow margin, with analysts estimating programming costs at around $30 before the CBS deal. 

AT&T executives are touting the virtual service’s ability to affect churn in other business areas, such as wireless. They also note opportunities in advanced advertising. 

The inclusion of CBS gives DirecTV Now a leg up against its formidable rival in the vMVPD market, Dish Network’s Sling TV, which still doesn’t have a CBS deal two and a half years after launch.

"We are pleased we have reached a deal to make the CBS Television Network, The CW and our cable networks available on DirecTV Now," said Ray Hopkins, president of television networks distribution for CBS Corporation, in a statement. "For any bundle to be truly successful, CBS is must-have content, and we are happy that AT&T will bring our hit programming to their DirecTV Now offering. This agreement fits perfectly into our strategy to deliver industry-leading content to viewers across multiple platforms and screens.”

AT&T said during its second-quarter earnings call two weeks ago that DirecTV Now is up to 500,000 subscribers. 

The CBS deal brings primetime CBS hits such as The Big Bang Theory to DirecTV Now homes, as well as Thursday night and Sunday afternoon NFL games.