CBS said its over-the-top direct-to-consumer services already have nearly 5 million subscribers, well ahead of expectations.
Speaking on CBS’s earnings call Thursday with analysts, CBS CEO Les Moonves said that subscriber growth for CBS All Access and Showtime’s OTT product are “far beyond where we expected them to be.”
Moonves said CBS expects to exceed its goal of 8 million subscribers by 2020.
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He noted that the streaming services generate higher fees than traditional distribution and create a direct relationship with viewers. That relationship yields valuable data, creating advertising that generates higher rates.
The OTT services area is also attracting the next generation of viewers, Moonves said. The average age of viewers on CBS All Access is 20 years younger than viewers who watch on broadcast and cable.
Similarly, CBS’s OTT news service, CBSN, has a young audience, with 80% of viewers between the ages of 18 and 49 and an average age of 38.
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CBS will be following the CBSN model with two more products. CBS Sports’ direct-to-consumer service will launch later this month, just before the start of March Madness and The Masters.
In the fall, an entertainment news service based on Entertainment Tonight will launch.
Both new services will be free and ad-supported.
“We’re setting ourselves up for the direct-to-consumer future,” Moonves said.
CBS All Access will also be going international, launching in Canada in June, and then in Australia and Europe.
With its OTT business, Moonves said that CBS was actually adding total subscribers and expects to surpass its goal of $2.5 billion in retransmission and reverse comp income by 2020.
"In a nutshell, changing viewer habits are resulting in more subscribers for us and at higher rates,” he said.
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