CBS Corporation ( CBS ) became the latest media company to announce an independent streaming service. CBS All Access , available from Oct 16, for a monthly subscription of $5.99 will offer access to the network's current as well as previous shows.
However, the company's lucrative sports content will not be available on CBS All Access owing to contractual agreement with sports authority prohibiting it.
Also, CBS Corp plans to come up with a digital news service later this month, as per varied sources. The development comes a day after Time Warner Inc. ( TWX ), at its Investors' Day, announced to launch an independent streaming service of its extremely popular channel HBO in 2015.
CBS All Access is now available on CBS.com as well as cellular devices for both Android and iOS systems. Subscribers will be able to live stream local CBS Television stations in 14 of the largest domestic markets initially. The content available will include seasons of current 15 primetime sitcoms (24 hrs after going on air), with last 8 seasons of hit series like The Good Wife and Blue Bloods along with classic shows like Star Trek , Cheers , Macgyver , Twin Peaks and CSI: Miami , devoid of advertisements.
Moreover, subscribers will have access to big events like The Grammy Awards, The Academy of Country Music Awards and The Victoria's Secret Fashion Show. The live streams will be taken into account by Nielsen's viewership measurement system.
Content monetization has been pursued aggressively by CBS Corp. for some time now and the launch of CBS All Access is a big step in the direction. Earlier, the company has struck deals with streaming services like Netflix, Inc. ( NFLX ), Amazon.com Inc. ( AMZN ) and Hulu to put its show like Blue Bloods , Hawaii Five-0 , Extant and Zoo on these platforms to boost the bottom line.
CBS Corp. like Time Warner is targeting the estimated $10 million consumers who have access to internet but do not subscribe to cable. The group consists mostly of 'millennials' who have moved to internet TV.
For some time now, streaming services like Netflix, Hulu, Amazon Prime Instant Video and YouTube have made internet TV quite popular, resulting in a large number of 'cord cutters.' Rising cable bills have also contributed to the increasing numbers of cord cutters.
These developments will definitely add momentum to the ongoing alteration in the television industry. Pay TV model is likely to take a big hit and in turn hamper the cable companies.
However, cable operators do not view these moves as disruptive. Furthermore, with live sports dominating the top slots, it would be very difficult to see cable services fade into oblivion as online streaming for these without a cable/satellite subscription is not in the offing in the near future.
Though CBS Corp. currently is a Zacks Rank #4 (Sell) stock, we expect an upward revision in rank soon given all these positive developments.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report