Jo Ann Ross, the president and chief advertising revenue officer for CBS, predicted on Thursday that Netflix will eventually offer advertising on its service.
“Maybe they will offer an ad-free version or a lower-cost version with ads in it,” Ross said at the AdExchanger Industry Preview event in New York. “If they are spending that kind of money, they are going to look for other ways to monetize.”
Ross’ comments came in the context of her touting CBS’ digital efforts, notably the CBS All Access subscription service (which has an ad-free version and an ad-supported model), as well as the CBSN free streaming news service.
“I think we saw the trend before others did, particularly now that Disney and ESPN will have their own OTT product some time in the next two years,” Ross said.
CBS plans to significantly increase its OTT offerings this year. In February, the company will launch a streaming sports service called CBS Sports HQ, and later this year an entertainment news service called ET Online.
Ross said CBS Sports HQ will be “like ESPN SportsCenter used to be: facts, not just talking heads, covering all sports.”
Ross said that CBSN and CBS Sports HQ will target younger male viewers, while ET Online should skew younger and female.
“CBS to date we don’t think has gotten much credit for the success of its direct-to-consumer initiatives (it's certainly not reflected in its multiple),” wrote JPMorgan media analyst Alexia Quadrani in a research note. “With the rollout of CBS Sports HQ and a potential entertainment news service, combined with CBSN, the company will be positioned with a complete offering of free ad-supported digital news offerings which we believe will be unmatched.”
With a free streaming news service, a free streaming sports service and a free streaming entertainment news service, CBS will have a robust trio of ad-supported streaming channels to sell against. When combined with the premium video inventory of CBS All Access, it makes for a compelling pitch.
In the past, broadcast networks' lure was mass audiences all watching at the same time. In a streaming world, everyone may be watching at the same time, but they are splintered among dozens of channels and services. CBS’ streaming portfolio may be divided among a handful of properties, but the end goal is the same: accumulate eyeballs of men and women, young and old, and sell against them.
“Where do marketers go when they want scale and they want immediacy? They go back to a broadcast network,” Ross told the crowd.