CBS is launching an online subscription video service that will
feature both current and classic programming as well as a live
stream of its broadcast network.
The platform, called CBS All Access, is making its debut
Thursday at a price of $5.99 a month. Unlike many other online
offerings from broadcast and cable networks, an existing
subscription to a pay-TV distributor isn't required to view content
on CBS All Access.
"CBS All Access is another key step in the company's
long-standing strategy of monetizing our local and national content
in the ways that viewers want it," said Leslie Moonves, president
and chief executive of CBS Corp.
Separately, CBS is also putting the finishing touches on its
plans to introduce a stand-alone digital news service later this
month. The tentative debut date is Oct. 28, people familiar with
the plans said.
The new offerings are further evidence of how program suppliers
are increasingly willing to distribute their content outside the
traditional ecosystem of cable and satellite TV especially as
consumers get frustrated with rising monthly TV bills. On
Wednesday, Time Warner Inc.'s HBO said it would start offering its
service via broadband to U.S. consumers who don't have a pay-TV
subscription.
In addition, as the competition for advertising grows more
intense, increasing subscription fees will become even more
important to programmers, which media analysts anticipate will make
the so-called over-the-top route more appealing in the coming
years.
"Everybody is going to the drawing board to figure out how to
make more money in this challenging environment," said Tony Wible,
an analyst at Janney Montgomery Scott.
Pay-TV distributors that compensate CBS in return for
distributing its content may be less than thrilled with CBS's new
venture because it could potentially undercut their value to
customers.
CBS officials counter that All Access will be complimentary to
existing video providers and that the price tag will limit its
appeal primarily to people who currently don't subscribe to a
multichannel video program provider.
In an interview, Mr. Moonves said All Access will be made
available to pay-TV companies as well, who could offer the service
to their customers for a lower rate.
"We think everybody wins from this," he said.
The CBS service is somewhat similar to Hulu, the video platform
jointly owned by 21st Century Fox, Walt Disney Co. and Comcast
Corp., which are the parent companies of Fox, ABC and NBC,
respectively. Hulu has both a free service and a subscription
option called Hulu Plus, which has about 8 million subscribers and
costs $7.99 a month.
The difference is that CBS All Access also has a live stream of
the network as part of its offering. ABC has a similar service
called Watch ABC that lets viewers get a linear feed of the network
on their phones and tablets. Unlike All Access, Watch ABC is
available to anyone with an existing subscription to a pay-TV
service.
Not all of CBS's popular content will be part of the live
stream. CBS cannot offer its Thursday and Sunday National Football
League games on All Access because its current contract with league
prohibits it.
"We hope to accomplish that before too long," Mr. Moonves
said.
The live stream of the CBS network will initially only be
available in the 14 markets where the company owns TV stations,
which includes New York, Los Angeles and Chicago. CBS is talking
with its broadcast affiliates in other cities about participating
in All Access.
CBS affiliates will get a percentage of the local subscription
fees for All Access, Mr. Moonves said.
CBS said episodes of current shows will be available on All
Access 24 hours after their initial airing on the network. The
commercial load in those shows will be about 25% less than their
network airing, said Marc DeBevoise, executive vice president of
CBS Interactive. While all episodes of current CBS shows available
on All Access will have commercials, older programs such as "Star
Trek" and "Cheers" will be commercial free.
"No one has gone out there and put out a network branded product
with the breadth and depth of CBS All Access," said Mr.
DeBevoise.
All Access will have more than 5,000 episodes from the show's
library. Mr. DeBevoise didn't rule out eventually creating original
content for the platform.
Write to Joe Flint at joe.flint@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
