Only a day after HBO announced its OTT intentions, CBS followed suit and unveiled its own online ambitions – with archived content, current shows and livestreams in CBS’s 14 largest markets.
The service is available now and costs $5.99 per month, which is much cheaper than the $15 that HBO is apparently due to charge. And right after this decision, Lionsgate said it will launch a premium SVoD service along with the Tribeca Film Festival. Everyone has the OTT video bug right now.
The CBS service is called "CBS All Access" and CEO Leslie Moonves said it was “another key step in the company’s long-standing strategy of monetizing our local and national content in the ways viewers want it.”
While US viewers are able to access much of the CBS content for free using an OTA terrestrial antenna, the monthly fee makes the content available to all internet-enabled devices without having to use costly workarounds such as the Tablo DVR – and adds the archived content to the mix too, which will be ad-free if it is not running on the air.
Moonves was an extremely vocal critic of Aereo, which captured over-the-air content and sent it OTT to subscribers – but without paying any form of royalties or retransmission fees to the broadcasters and rights holders. The key difference here is that CBS is sending its own content over the data pipes, and not treading on the toes of the rights-holders. During the Aereo proceedings, Moonves hinted that CBS might ape Aereo, and now it has taken the plunge.
CBS All Access will be available in a web browser as well as iOS and Android apps. CBS says eight of its current shows (including Blue Bloods, The Good Wife and Survivor) will have their previous seasons added to the OTT platform, as well as 5,000 episodes of classic shows including Star Trek, Cheers, MacGyver and Twin Peaks. Current primetime shows will be available on the platform the day after they air.
For some Trekkies out there, the subscription will be easily worth the access to every episode ever made, but we don’t expect to see a dedicated line for that broken out in the reporting. Nielsen will also be extracting new data sources from the livestreams.
Going OTT lets CBS simultaneously cut out the middleman and hold him to ransom. That is: it can bypass the cablecos, ISPs and satellite companies by going straight to any consumer with an adequate internet connection, while also using that threat as a hammer to beat them down in contract negotiations.
Content going straight over the top is the first transformative step towards breaking the stranglehold that the telcos, cablecos and satellite providers have over studios and broadcasters. If a studio knows it can pipe its content in a SVoD package straight to the consumer, instead of being cut out of the supply chain through a failed renegotiation with cable for example, then the carriers who control the pipes are demoted to being simply bit carriers and not a business which exerts control over the content production industry.
This OTT play will also have major ramifications on the contracts signed to secure exploitation rights for content. Behind the scenes, CBS has been restructuring its contracts to enable it to launch CBS All Access for the past year, but from here on in, the importance of the OTT rights and exclusivity will be paramount in contract negotiations between studios and networks, as well as between networks and broadcasters.
One question we should ask is: what does this mean for Hulu, the OTT service set up by CBS rivals ABC, Fox and NBC? Hulu also offers an archive of broadcast content, but not much live programming, and now that a network outside of Hulu has begun going OTT, the other networks may follow suit – removing their need for Hulu entirely. Or one of them may end up owning Hulu and using it as their OTT brand.
Hulu’s $8-per-month offering looks to be the better deal if CBS, ABC (Disney), Fox and NBC begin charging $6 each ($24 total) for their content OTT. Perhaps the three networks will decide to add livestreams to Hulu and increase its archive and package it as an OTT IPTV offering with a larger or tiered monthly subscription prices. If that is the case, they could collectively price CBS’ lone offering out to the edge of the market, while simultaneously appealing to the cord cutting/shaving market that is slowly emerging.
It’s not unreasonable to think the Hulu branding might be replaced with something else too, but it’s also entirely possible that Fox, NBC and ABC decide to go independently OTT and leave Hulu to die. Currently Hulu offers two tiers of service: a free version that is entirely ad-supported and the Hulu Plus subscription, which adds an expanded content library and is available on more platforms than the standard Hulu, but still features advertising. Hulu Plus costs $8 per month and has over 1.5 million subscribers.
Elsewhere in the OTT game, Lionsgate and Tribeca Enterprises have teamed up to offer a SVoD service called Tribeca Short List, due to launch in the first half of 2015. The platform “will encompass a prestigious selection of Lionsgate and Tribeca titles as well as critically acclaimed films drawn from around the world.” The library will be curated by Tribeca and refreshed on a weekly basis, and is a departure from the quantity-over-quality approach favoured by other services that are attempting to leverage the Tribeca reputation among film aficionados. There’s no word on price yet.
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