During CBS' last earnings call in July, analysts who were expecting CBS Corp. CEO and chairman Leslie Moonves to do little more than brag about his network's big upfront gains were in for a surprise. In addition to his upfront boasting, Moonves revealed that CBS All Access, CBS' over the top streaming service, already has around 1 million subscribers paying $5.99 each. (He said Showtime's stand-alone subscription service has a similar number.) That's "well ahead of where we thought we'd be at this point in the game," said Moonves.
He wasn't alone. "I don't think there's anyone who thought they had a million subscribers," said BTIG Research media analyst Rich Greenfield. "Most people thought the number was far less than half of that."
Now CBS is hoping to push that subscriber number much higher as it rolls out its first original series beginning later this month (see below). Big Brother: Over the Top, a digital-only version of the CBS summer staple, will debut Sept. 28. That will be followed in January by Star Trek: Discovery, with a Good Wife spinoff coming next spring. Those shows will supplement the service's 7,500-plus episodes of current and classic shows, as well as access to livestream the local CBS station.
For its first original shows, execs targeted CBS All Access series that "popped off the map in terms of indexing versus their [linear] ratings," said Marc DeBevoise, CBS Interactive president and COO, noting that Big Brother and The Good Wife both performed unusually strong online. "But we're not just going to make stuff for the people who already subscribe. We want new subscribers."
And new advertisers. The site skews much younger than the broadcast network (65 percent of subscribers fall in the 18-49 demo; CBS' current median age is 59, according to Nielsen), which attracted buyers' attention during the upfront.
"We're pretty optimistic about it. When we look at where behavior is shifting toward, over the top is an area we see a lot of potential in, and the fact that they will have originals is very appealing," said Maureen Bosetti, chief investment officer at Initiative. During the upfront, she added, All Access "was more a part of our overall video strategy"—which also included Hulu and YouTube—"versus just a CBS complement." (While CBS and CBS Interactive teams work together and separately to sell All Access ads, some of the digital inventory was sold "side by side" with linear during the upfront, said DeBevoise.)
To woo those who grumbled about seeing ads on a pay service, CBS All Access has also followed Hulu's lead, and last week rolled out an ad-free version for $9.99. (Subscribers will still see ads in the CBS local livestream, and up to 30 seconds of CBS promos per half hour.)
That's the same monthly fee as a Netflix subscription, but the SVOD battlefield isn't a winner take all. "The world's moving to streaming," said Greenfield. "Not just Netflix is going to be a winner, but there's going to be a wide array of winners, from CBS to Starz to HBO Now to Hulu."
All Access doesn't have to beat Netflix, but the service does have to pass muster with Moonves, who has targeted 8 million combined CBS All Access/Showtime subscribers by 2020. Whether All Access meets that goal will come down to the strength of these new original series, said Greenfield: "The only way they're going to make that million become 5 million is by having great programming you can't get anywhere else."
This story first appeared in the September 5, 2016 issue of Adweek magazine. Click here to subscribe.