CBS Shows Advertising Gains From OTT Platforms

CBS is currently showing stronger traditional TV advertising results, and says it has also gained in ad revenue from its OTT platforms CBS All Access and Showtime.

During its earnings call on Thursday, Joseph Ianniello, president/acting chief executive officer of CBS Corp., said: “We're really starting to sell beyond demographics. And I think that is really proven to be extremely valuable to our advertising clients, but also to the content creators as hopefully, we can make shows that speak to our audiences.”  

Ianniello did not provide specific advertising data.

CBS All Access and Showtime have a collective 8 million subscribers, and are now estimated to grow to 25 million by 2020 -- up from an estimate of 16 million.

Ianniello also touted that CBS All Access, for a network-run OTT service, has a big commitment locally from TV station affiliates.

“It's the only platform in this country that has done partnering with all of our local affiliates that has 180 different commercial ad loads that has live local programming plus catch-up viewing, plus original series inside and outside the home.”

Starting in 2017, CBS All Access had three originals series, and the total has now risen to 11 this year.

Michael Nathanson, senior research analyst for MoffettNathanson Research, says CBS is looking at producing original content as well as acquiring content on these platforms -- and that’s a good thing.

“There are a larger set of companies -- WarnerMedia, CBS, Lionsgate, NBCUniversal -- that are building direct-to-consumer capabilities as they continue to license content to third-party competitors. We call this the 'have your cake and eat it too' approach."

He added: “We believe that CBS management is doing the right thing too, by doubling down on increased content.”

Overall, CBS says that from all its TV studio operations, it is producing 76 original series -- up 17% from just a year ago.

Currently, CBS says scatter advertising pricing on its national broadcast TV network is up 25% for the first quarter of 2019 versus upfront pricing set in the summer a year ago.

Total company-wide advertising revenue in the fourth quarter of 2018 grew 7% to $1.9 billion, mostly from political advertising at its local TV stations.

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