LAS VEGAS — The flood of streaming services that have entered the pay TV marketplace in the past decade have been viewed as signs of the apocalypse for the traditional MVPDs.
But in practice, the track record to date shows that most subscribers to streaming services also continue to pay for regular MVPD services. That’s one of the big lessons that CBS executives learned during the past six years since they took the leap into direct-to-consumer with the October 2014 launch of CBS All Access.
“It’s not a cord-cutter service. It’s actually the opposite,” Marc DeBevoise said Wednesday during a Q&A at Variety‘s Entertainment Summit held annually as part of the Consumer Electronics Show.
DeBevoise, who was recently promoted to chief digital officer of ViacomCBS and to CEO of CBS Interactive, said that CBS’ research has found that about 79% of All Access subscribers also pay for traditional MVPD services in addition to other streaming services. At present, about 80% of American households have an average of at least three and a half subscription services, “and that number is growing,” he said.
ViacomCBS’ research indicates that “there are about 200 million subscribers up for grabs over the next three to five years, with about 180 million in the marketplace today,” DeBevoise said during his session at the Aria Resort Hotel. “It’s a great opportunity.”
ViacomCBS’ digital leader said the company was on track to reach its previously stated target of amassing 25 million total subscribers across CBS All Access and the standalone Showtime streaming app by the end of 2022. He noted that ViacomCBS is the biggest player in digital content among its media conglomerate peers, behind only the tech giants. In ComScore’s monthly rankings ViacomCBS and its CBS predecessor typically lands in the No. 6 or No. 7 slot, although that may change with the onset of Disney Plus.
“We’re the largest pure content play on the internet,” DeBevoise said. “We have a tremendous opportunity to grow our digital business across the portfolio.”
CBS All Access is growing at a good clip thanks to a stepped up investment in original content, DeBevoise said. CBS is banking on big properties like the latest iteration of “Star Trek,” “Star Trek: Picard” to keep churn to a minimum. CBSN, the free ad-supported news service, is also enjoying a big spike at present in light of the escalation of tensions between the U.S. and Iran and the quickening pace of the 2020 presidential race. “Picard,” a glossy part of the plan to deliver “a tentpole every quarter,” launches Jan. 23, he said.
DeBevoise spoke the same day that ViacomCBS unveiled a new carriage agreement with Comcast for CBS O&Os, Showtime and other channels, a deal that includes for the first time Comcast’s commitment to make the CBS All Access app available on the homepage of its X1 operating system, and on its Flex low-cost streaming service. That could potentially funnel millions of potential subscribers to CBS, especially around key events like NFL games and the Grammy Awards.
“The one place we hadn’t been able to place the service yet was the set-top box,” DeBevoise said. He aims for the Comcast pact to be the first of many MVPD deals to come.
DeBevoise, who joined CBS Corp. in 2011 after previously working for Starz and NBCUniversal, spoke about the surprises and challenges of launching CBS All Access when streaming was still in its infancy. One important lesson he learned was about pacing himself.
“We launched CBS All Access on October 16, 2014, and we launched CBSN on Nov. 4,” he recalled. “Don’t ever do that.”