The deal was hammered out over the past few months by CBS execs and the Eye’s affiliate board, headed by Dispatch Broadcast CEO Michael Fiorile. The deal framework has been endorsed by the CBS Affiliate Board, which should help smooth the way for pacts with other groups such as Gannett Broadcasting down the road.
The biggest gain for the Eye is that affiliate stations representing 56 markets will offer the live linear feed that is a major component of CBS All Access, which launched in October. The service sold for a $5.99 monthly fee also offers subscribers all current-season episodes of most CBS series, as well as a deep library of vintage series ranging from “I Love Lucy” to “Star Trek” to “Beverly Hills, 90210.”
The stations will offer 24/7 Web simulcasts of their local signals, including syndicated series, newscasts and other shows beyond CBS-provided programming. With more stations on board, CBS can pump up the marketing for All Access as offering the ability to watch live streaming of CBS programming across the country. All Access subscribers who travel outside of their home markets will not be able to access their hometown station, however, but would receive the local CBS affiliate feed, so long as that station is on board with All Access.
With the 12 groups signing on coupled with CBS’ 14 O&Os, the Eye will be able to offer live streaming in markets covering 55% of U.S. TV households. The station groups signing on are Dispatch, Graham Media, Gray, Hearst, Lilly Broadcasting, Meredith, Morgan Murphy, Morris Network, Neuhoff Media, Nexstar, Raycom and Withers. Those groups encompass such mid-sized markets as Atlanta, Phoenix, Orlando, Cleveland, Columbus, St. Louis, Charlotte, Hartford, Kansas City and Las Vegas.
Details of the revenue-sharing deal were not disclosed, but the affiliate station owners will receive a portion of the $5.99 monthly fee for every subscriber that signs on in their markets. Viewership of the live linear feed will be measured by Nielsen and calculated as part of each station’s overall daily ratings.
“This is another key step in the company’s longstanding strategy to grow our business in a way that complements our existing ecosystem,” said Leslie Moonves, CBS Corp. president-CEO. “Adding CBS affiliates to the mix will give viewers the opportunity to watch more CBS programming whenever they want on whichever device they choose.”
Ray Hopkins, CBS Corp.’s president of television networks distribution, led the discussions with affiliates. The situation was not so much contentious on the financial parameters of the deal but a matter of making all sides comfortable with a ground-breaking service for broadcasters.
One of the questions was how CBS All Access would mesh with future TV Everywhere-style authenticated offerings that stations may set on a local basis with MVPD providers. That remains a work in progress, for CBS as well as its affils, although as an SVOD service CBS All Access is a distinct window from on-demand rights that might be rolled up into carriage and retransmission consent negotiations with MVPDs. But those considerations are a sign of how complicated the on-demand world has become.
“What we have done with CBS All Access was really so new and innovative and different than what any other network group has done,” Hopkins told Variety. “We feel very good about the fact that we had a constructive dialogue with our affiliates on the launch of this service. There was a lot of give and take.”
Hopkins and Marc DeBevoise, exec VP and g.m. of entertainment, sports and news for CBS Interactive, would not comment on the number of subscribers that have signed up since All Access bowed on Oct. 16.
Moonves has said in recent Wall Street investor presentations that they are happy with the pace of growth for the fledgling product so far. Hopkins said that the largest component of CBS All Access usage so far was viewing of current-season shows, followed by the live linear feed.