Until they work things out with the NFL it's not worth any money. The rest of the programming is available elsewhere.
CBS Offers Web Service as TV Unbundles Itself
41–43 of 43 posts
Re: CBS Offers Web Service as TV Unbundles Itself
#42For the live stream, the ads will be the same as those on the traditional television broadcast. For the on-demand programming, the typical 12 to 16 minutes of ads an hour will be reduced 25 percent. I guess I'm not their intended customer. I'm not going to pay for a service to give me ads. If I'm watching a live show, I want the ability to pause it, walk away for a few minutes, and then skip commercials. For on-deman…
The problem is the same as it is with print; the subscription fee usually only covers the cost of distribution. The cost of content is typically paid for by advertising, which brings in more than subscriptions do. This CBS streaming service is going to be $6/month. So for each million subscribers they get $6m/mo.
But CBS's most show, The Big Bang Theory, which is the most popular show in the USA in that time slot, pulls in about $6.5 million of ad revenue every episode. So CBS would need 4 million subscribers just to match the revenue stream from that one show. Put another way, they need 50k subscribers to replace the ad revenue from one single 30-second commercial spot on that same show. http://www.ibtimes.com/economics-prime-time-how-much-does-it...
This is why the economics of TV are so brutal and many shows are canceled after only a few episodes or a single season. It's not necessarily the fault of the show itself - if a new show goes up against a much stronger offering from another channel, it may not attract a critical mass of viewers and it's more economical to cancel further production and fill the time slot with repeats of more popular material that draws a reliable audience.
Now it could be possible for individual shows to break even. I don't watch a lot of TV, so I only ever watch one program on CBS, a show called Elementary. I would be willing to consider paying something like $1/episode or $25 for the whole season up front - but that has run for a few years already. For launching a new show with the production value and baseline quality of acting that a commercial audience expects, you probably can't get people to pay for it without spending the same amount of money on marketing as on the production itself. So without the cross-subsidies from advertising it would be quite difficult to raise the capital to finance new TV shows. Obviously you have alternatives depending on what sort of show you want to make, eg you can produce a wacky animated comedy relatively cheaply and launch it on YouTube or somesuch to get your initial audience critical mass. But if you want to do an hour-long serious drama or current affairs or science programming, your up front costs are far higher and you need people to open their checkbooks - your MVP probably costs at least $1 million.
Re: CBS Offers Web Service as TV Unbundles Itself
#43I'm going to assume they started on this effort at the same time they started making loud noises about Aero and their "mini" antennae. I agree that it seems strange to have both pay + ads, which is clearly a grab at both the money people paid to the cable/satellite company and the revenue they get from advertisers. I would subscribe to a service where it was free and the ads paid for it (like broadcast TV), or it cos…
> I agree that it seems strange to have both pay + ads > I would not be a fan if this pay and pay model became the norm. Maybe you've heard of cable television for which you both pay and see ads? I think it might catch on at some point...
Snarkiness aside, think about what the "value" is/was that cable brought to the transaction. The value of cable was that you could get channels (and thus content) that you could not get from 'over the air' stations. Early cable adopters people with poor or non-existent over the air reception. Then cable added the equivalent of UHF channels (sorry if that is a US centric thing but all of the channels on that band in the US were a bit 'off'). Then came the 'movie' channels which you could only get on cable and the reason people paid for cable was that other content which they had no other way to get.
Internet service was never a threat until bandwidth got to the point where you could watch video on it with the same fidelity as bad TV, then suddenly other ways to get alternate content were available. Netflix dropped into that change just as affordable 1 - 3 mbit bandwidth was hitting (the whole ADSL revolution in the 90's) and since the bandwidth race that has just gotten worse.
So cable, which you paid for, was the only way to get this "other" content, which carried free over-the-air content with its concommitant advertising as a 'favor' to its subscribers so they didn't need an antenna (and they did get better reception, but not HD, but that is a different thread). Now folks are dumping cable for things like Netflix and Hulu because they can get content "ala carte" and Netfix on demand is better than all of the 'budget' movie channels on cable (think Encore, Starz, or Cinemax) and now they go back to over the air reception (now digital) of the free content. Comcast is disintermediated because they don't bring anything to the party (except, to their pain, fast internet access).
That is the sea change that is going on here. Fat pipe providers as a commodity, and a bunch of different services being content providers on demand.