CBS: 1M Showtime OTT Subs Equals $100M in Revenue



CBS Corp. CEO Les Moonves

CBS Corp. CEO Les Moonves, a longtime fan of subscription video-on-demand, said initial consumer response to Showtime’s new $10.99 monthly streaming service has been promising.

The premium channel’s standalone streaming service, which launched in July, along with CBS All Access ($5.99 monthly) and ad-supported CBSN represent the media company’s attempt to attract new viewers in an evolving digital media landscape.

“This will enable us to gain subscriptions from a potential new audience of as many as 90 million households,” Moonves said on the Aug. 5 call. “Capturing just a small percentage of these subscribers will begin to pay off immediately and will lead to a tremendous upside for us.”

While Moonves didn’t disclose initial sub data for Showtime OTT or other digital properties, he seemed confident enough to proclaim that for every one million Showtime streaming subs, CBS would realize $100 million in incremental revenue — much of it to the bottom line.

In other words, CBS is calculating that a Showtime OTT sub keeps the service for at least nine months.

“We didn't have to buy some other company or outsource anything to get [OTT video] off the ground. We own the technology,” Moonves said. “So these broadband offerings will drive high-margin income as they continue to grow.”

COO Joseph Iannello said breaking even with Showtime OTT isn’t an issue. He said the branded service is being farmed out internationally, including in Canada where CBS is working with Bell Canada to offer a SVOD service option to telecom subscribers.

“We're trying to be indifferent and being flexible to what the opportunity is, but basically, the fundamental theory is the content is working, the brand is working, and Showtime we have to think about as a global brand,” Iannello said.



