CBS on Thursday launched an online streaming service that allows consumers to view current and previous seasons of its shows without a cable or satellite subscription, adding momentum to a radical shift in the television industry toward a la carte digital entertainment.
CBS’ move follows HBO’s announcement this week that it plans to offer a stand-alone Internet service next year. Together, the announcements by CBS and HBO mark a significant change from two industry leaders that have been at the heart of the lucrative business of cable television bundles.
For $5.99 a month, CBS said mobile viewers will get access to 15 primetime shows the day after they have aired on broadcast and cable. In its 14 largest markets, including New York, Los Angeles and San Francisco, viewers will have access to live streaming of CBS content. The Washington D.C. area is not included in those markets, but CBS representatives said they are working with local affiliates to provide live programs — such as awards shows and primetime programming — in the near future.
NFL games, which draw huge television audiences, are notably absent from the “CBS All Access” service. CBS has a contract for Thursday night NFL games.
“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, CBS Corporation’s president and chief executive.
“This new subscription service will deliver the most of CBS to our biggest fans while being additive to the overall ecosystem,” he said. “Across the board, we continue to capitalize on technological advances that help consumers engage with our world-class programming, and we look forward to serving our viewers in this new and exciting way.”
Until recent years, CBS had been reluctant about putting its programs online. In 2007, it declined to join broadcasters NBC Universal, Fox and ABC, owned by Walt Disney Co., in the creation of Hulu, the online platform for network television.
Analysts say that decision in retrospect has given CBS more flexibility to negotiate online distribution deals with Amazon and Netflix and to create its own platform.
It’s unclear if consumers will be willing to pay $6 a month to watch “NCIS” or “The Good Wife” online when those shows are already available through traditional antenna-based broadcast television. Cable subscribers may not find the service valuable enough to cut the cord, especially since live NFL games aren’t included.
But like HBO, CBS appears to be targeting a demographic that already doesn’t subscribe to cable in the first place — an estimated 10 million homes. And CBS, which has the oldest median audience–58.7 years old–of the broadcast networks, has been trying to lure younger viewers, who tend to be more interested in watching their shows online.
The prospect of a la carte online television could appeal to frustrated cable customers who are looking for cheaper entertainment alternatives. Sony, Dish and other media and telecom giants have responded with their own plans for online-only video services. But a large portion of the most lucrative programming on television–particularly live sports–is still available first on cable.
Another consideration for consumers is how much all these separate packages will cost together.
“All these services can add up,” said Wade Holden, analyst at SNL Kagan. “Price for all these services — especially HBO — will be a key factor.”