As it boldly embarks on self-distribution of its programming, CBS Corp. said it is currently making around $100 million in revenue off both its Showtime and CBS All Access SVOD platforms.
CBS COO Joseph Ianniello expounded on these economics earlier this week, while speaking at Nomura’s 2016 Media, Telecom & Internet Conference. The “back of the envelope math,” as Ianiello called it, is compelling to pay-TV operators, given that CBS has taken the most aggressive position among broadcasters in regards to negotiating retransmission licensing fees, as well as distribution on operator-backed OTT platforms like Sling TV.
He said that some of CBS’ partners discounting the $11.99 monthly price of the a la carte streaming Showtime, and CBS is netting “eight and a quarterish” in monthly average revenue per user (ARPU) on the platform.
He said ARPU is similar for All Access, which costs consumers $5.99 a month, but also factors in revenue-sharing with affiliate station operators, as well as revenue from advertising.
Earlier this month, CBS revealed that it currently has around 1 million subscribers for both platforms.
Ianniello said the proven success of these SVOD platforms has enabled it to hold a firm negotiating position opposite operators like Dish Network and Sling TV. Currently, CBS is the only major broadcast network not featured on Sling TV.
“It’s about terms and conditions,” he said. “What we don’t want to do is replicate the model of the traditional system, that is proven to not be working. If the current model was working, we wouldn't need any of these other things … If you want content outside the home, that’s a value proposition. If you want older episodes, that’s another value proposition. It’s not the traditional bundle — hat’s a fundamental thesis we believe in.”
Ianniello said All Access will ascend to another level of size and influence when the reboot of Star Trek arrives exclusively on the platform next year.
The show, he said, will “skew male and deliver a whole new set of subscribers we don’t even have in the base yet.”
Meanwhile, with CBS developing the technology infrastructures for both its SVOD platforms in-house, Ianniello also remarked on rival Disney’s $1 billion purchase earlier this month of OTT shop BAMTech.
“When I see these numbers of what HBO and Disney are [paying] to BAM, it’s pretty staggering,” he said.
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