After five Gray TV-owned stations launched CBS All Access late last month, four more, including CBS affiliates in Knoxville and Lexington, are set to debut the landmark live-streaming service this week. Some 60 stations aim to premiere the service before the fall season, with the 26 CBS affiliates in the Gray group being a big chunk of that number. Paired with the 14 owned stations that have launched, All Access will be available in excess of 55% of U.S. households, says CBS.
While other groups are weighing the costs and benefits of partnering with CBS on the mobile service, Atlanta-based Gray is clearly all-in. “It allows our audience another way to see CBS and to see our stations,” said Mike Braun, Gray VP of digital. “That’s what makes it so important.”
Gray was also first among station groups to sign up with NBC for its TV Everywhere consumer product. Kevin Latek, Gray senior VP of business affairs, detailed the group’s forward-thinking digital philosophy during its earnings call May 5. “We do not know whether the preferred approach to mobile delivery will be TV Everywhere or direct-to-consumer, or some combination of both,” he said. “Still, it is important that we explore both of these approaches with our network partners and learn with them what works best in the mid-sized and small markets that we serve.”
Taking It to the Stations
CBS announced its digital subscription service in the fall, with All Access offering a live stream of both national and local content, and CBS programming—current and archival—on-demand. Leslie Moonves, president and CEO of CBS Corp., called it “another key step in the company’s long-standing strategy of monetizing our local and national content in the ways that viewers want it.”
Getting affiliates on board was essential for the service to have truly national reach. In March, the CBS affiliates board agreed on All Access terms on behalf of the stations, and a month later, CBS trumpeted agreements with major groups such as Hearst TV, Meredith and Nexstar. Nexstar’s KLAS Las Vegas debuted All Access to coincide with the NAB Show last month in Sin City; Perry Sook, Nexstar president and CEO, told B&C it is too early in the game to share information.
Subscriptions go for $5.99 per month. Stations stand to get 79 cents per sub to start, ramping up as more subscribers come online. The network-affiliate agreement says CBS is not initially obligated to share local subscriber details. Once a threshold is reached, believed to be close to a million households signed up, the terms of the deal will change—and affiliates will learn of their subscription, and revenue, numbers. “We pressed hard to get the data and they were not willing to share it,” said Michael Fiorile, CBS affiliates board chairman.
Vital to Gray’s expedient rollout is that the group had deployed Syncbak, the technology that drives All Access’ servers and connectivity infrastructure, a few years ago to stream local programming. Jay Barton, VP and general manager of Gray’s WCAV in Charlottesville, Va., likens the All Access enrollment experience to signing up for Hulu or Netfix. “It’s been very smooth,” he said, “and it looks like a million bucks.”
It takes between two and four weeks for CBS to run an equipped television station through the testing process and sign off on its All Access readiness. CBS supplies its partner stations with what Marc DeBevoise, executive VP and general manager of CBS Digital Media, calls “a set of marketing assets” that includes online and on-air promotions pitching All Access to various potential customers—whether they are fans of live music events, such as CBS’ annual Grammy Awards telecasts, or hardcore consumers of the network’s CSI franchise programs. “Having the live [network] feed, and the live local feed, is a real benefit to consumers,” DeBevoise said. “I don’t think any other service provides that today.”
Gray’s Braun suggests All Access is more about reach than revenue. Besides Knoxville and Lexington, Gray stations in Waco, Texas and Harrisonburg, Va. plan to flip the All Access switch in the coming days. He acknowledges that today’s consumers want specific programming when they want it, and on whatever screen happens to be in front of them. Meeting consumer demands, he says, is critical to forging ahead on the digital frontier. “We felt this was too important,” Braun said, “to sit back and wait in line.”
ACQUISITIONS BOLSTER BOFFO BROADCASTER QUARTERLY EARNINGS
The mergers and acquisitions fever that gripped local broadcast in recent years is paying off in quarterly earnings. Sinclair cited its pickups, including the Allbritton and New Age groups, in fueling first-quarter revenue of $504.8 million, 22.3% better than last year. Digital revenue increased 77.8%, and David Smith, president and CEO, said the investments in that division will continue. “Recently, we announced several initiatives expected to add longer-term value and growth opportunities, including the launch of our Digital Ventures group, which will develop and enhance our digital capabilities,” he said.
Gray Television’s first quarter revenue was $133.3 million, the highest for any first quarter in company history, and a 46% increase over last year’s Q1. Acquisitions in Toledo, Flint and Sioux Falls, S.D. gave Gray a boost.
Nexstar, meanwhile, reported first-quarter revenue of $203.4 million, a 52% increase year-over-year. In January, Nexstar closed on the Communications Corporation of America group, followed by stations in Phoenix and Las Vegas. “We expect 2015 to mark the company’s fourth consecutive year of record free cash flow,” said Perry Sook, chairman/president/CEO, “as our platform expansion and revenue diversification efforts have eliminated the cyclicality associated with political advertising.”
The smarter way to stay on top of broadcasting and cable industry. Sign up below.
Thank you for signing up to Broadcasting & Cable. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.