CBS on Tuesday sketched out a plan so in five years -- with four million subscribers -- its ad-supported, digital over-the top-service CBS All Access could make $400 million a year.
Let’s say the current $6 a month price is still in force by the time, which gives CBS $288 million a year in subscription fees. That means around $120 million a year or so will come from the digital advertising on CBS All Access.
And that’s not the whole story.
Rough estimates suggest that the entire yearly take of digital advertising revenue from prime-time shows on all digital platforms for the five English-language TV broadcast networks (Hulu, network-owned apps, etc.) comes to around $2 billion a year.
What does each network pull in? Hard to tell. Perhaps looking at the share of traditional national TV ad dollars would give us a better idea.
In any event, that level of revenue may not make much of a difference when looking at the entire $70 billion-plus TV advertising business. But it may stand out in the total digital video market, expected to hit $9.4 billion this year and $11.7 billion in 2017, according to eMarketer.
Even in light of the complaints about insufficient digital TV measurement by major media measurement companies, this is good news: TV advertisers want premium digital video, and they know where to find it.
Premium original TV network programming running on digital platforms continues to mean tight commercial inventory supplies, with CPMs some three or four times higher than for comparable traditional TV inventory.
There’s still plenty of worries about how much overall the digital ad business is taking away from traditional TV -- but what's really needed is determining what advertising share traditional TV is getting out of digital media. It’s always about the bigger picture.