Given the rampant level of fragmentation across the streaming video marketplace, it at least seems feasible that CBS All Access and Showtime OTT, both operated by CBS Corp., could combine. But Jim Lanzone, CEO of CBS Interactive, is shooting down the idea for now.
Lanzone said Thursday during CBS’s first-quarter earnings call that backend streaming video operations are already cost efficient as is. On the front end, he said that the user bases and business models are differentiated. But he didn’t rule out a combination completely.
“It’s not that they couldn’t come together in the future. They could, and we could add more content to that internal bundle,” said Lanzone. “We are looking at it. It’s something to consider for the future. But it’s definitely not something by any means that’s held us back on sub growth.”
Joe Ianniello, president and acting CEO at CBS, said having them separate is about giving consumers options. CBS does offer discounted price packages to consumers who want both services.
“Consumers want choice, convenience and control,” said Ianniello. “We’re serving that up to them and they will decide. If we combine them, we actually think we could have less subscribers.”
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CBS in its earnings release did not provide an updated subscriber count for All Access and Showtime combined. The company did say that subscriber totals for those services were up 71% year over year. The company said it’s still on track to meet its goal of 25 million combined subscribers by 2022.
Perhaps standing in the way of CBS and its subscriber growth goals is an expanding competitive field in streaming video. Disney and WarnerMedia will both launch subscription video streaming services this year and NBCUniversal will launch an ad-supported service in 2020.
Lanzone said that CBS does not view the streaming industry as a zero sum game, but that there isn’t an infinite number of seats available on the SVOD rocket ship.
“There aren’t that many people who spend $8 billion plus per year on content and do it as well as we do,” said Lanzone. “If we play this right, there’s definitely a seat for us on that ship.”