• by Alex Weprin , November 2, 2018

When CBS executives gathered on the company’s last quarterly earnings call, the big story wasn’t the broadcast network, where the company remains on top.

Rather, the company (now with an interim CEO in Joe Ianniello, following the resignation of Les Moonves) wants investors to believe its future is in digital.

Indeed, digital was a bright spot for the quarter, which saw revenues rise overall by 3%. The company’s direct-to-consumer offerings, CBS All Access and Showtime, combined with new distribution on streaming virtual MVPDs, grew 79% year over year, CBS CFO Christina Spade told analysts on the company’s earnings call.

The company previously said it expects to hit 8 million subscribers between CBS All access and Showtime in 2019, and the company reaffirmed those expectations on the call.

However, the company also highlighted the advertising opportunity on streaming, noting that they were launching a new division meant to capitalize on dynamic ad insertion.

CBS CEO Joe Ianniello said on the call that two-thirds of CBS All Access subscribers pay for the ad-supported tier, while one-third are on the ad-free tier (ads are still included in live programming, of course).

“We're seeing CPMs significantly higher [on streaming] than comparable broadcast networks. And obviously, you have more attractive demos, but you have with it, as you call it, specific targeting, so we're rolling that out,” he said. “As we're using this data to be smarter and be more effective for our advertisers, it's a really big opportunity.”

The company also sees streaming opportunity in another key area: international expansion.

CBS launched All Access in Canada earlier this year and will launch a version in Australia under the Channel 10 brand, which the company acquired in early 2018.

“A lot of the costs are fixed. So it that infrastructure will be scalable,” Ianniello said.

The company also has plans to deal with restrictions in the E.U. and elsewhere that require a certain percentage of local content on every direct-to-consumer service.

“In some of these markets where there are local restrictions, we will partner with some of our local friends to make it again a compelling offering,” Ianniello said.

CBS also touted its free, ad-supported streaming services, CBSN, CBS Sports HQ and ET Live, which launched this week.

Ianniello said CBSN now averages 1 million streams per day; the average age of viewers is 38. CBS Sports HQ has more viewers than CBSN did at the same time after launch.