Friday, August 26, 2016

CBS's Newest Revenue Stream

The rise of streaming, the challenge to increase ad revenue as well as licensing of its network to cable companies all play into the strategic mix as CBS seeks revenue growth.  Certainly content matters and quality shows that generate buzz hope to find audiences that stay loyal to their plots.  And building new distribution outlets to grow as a business remain relevant.

In the case of CBS, they chose not to be a partner in the Hulu streaming business.  The other three broadcasters NBC, ABC, and Fox, and now Time Warner have ownership shares in the Hulu business.  Instead, CBS is trying something new, its own streaming subscription service called CBS All Access.  For a $5.99 monthly fee, subscribers get "more than 7,500 on-demand episodes from the current season and previous seasons of classic shows, as well as the ability to stream local CBS stations live in more than 150 markets across the U.S." according to Multichannel News.  And following the learning curve of other streaming services like Amazon and Netflix, CBS All Access will offer original productions too, "including Star Trek: Discovery, a spin-off of The Good Wife and a new digital edition of Big Brother."

The question this strategy hopes to answer, is it better to build a new service or partner with an existing one.  Is there enough content of interest to subscribers to entice them to join?  Can marketing sell the value of adding another streaming service charge to the entertainment household budget?  CBS is trying to make it easy to access its streaming service with Roku, Apple TV, Chromecast, XBox, Amazon Fire TV and more.  Accessibility does not seem to be a problem.

But I wonder if going it alone and not with Hulu, CBS studied whether a brand name associated with the broadcast network or one without a connection made more sense.  Will customers more likely embrace the subscription service because of the CBS name or feel that they should be getting this content already if they are current cable subscribers with on demand.  Would it have better suited the service to create a more unique name like Carousel or Tainment or StreamCity to compete in the streaming media landscape?  Was CBS All Access a better name choice to drive subscription revenue?  We will watch and see.