A new era of pay-per-view has arrived for good this week – seemingly all of a sudden and faster than many industry executives and TV fans anticipated. And with it, the virtual monopoly that cable, satellite and telecommunications companies had on television programming is dissipating.
Just a day after HBO announced it would launch an internet-only offering, CBS on Thursday announced its own subscription-based streaming service that allows people to watch its programming live and thousands of current and past shows. demand.
These moves mark a watershed for webcast television, where viewers have more options to pay only for the networks or programs they want to watch – and to decide how, when and where to watch them. The days of people paying an average of $ 90 per month for a set of networks from a traditional provider are quickly fading away.
“Everyone’s talking about it,” Leslie Moonves, CEO of CBS Corporation, said in an interview. “It’s an important part of our future. Our job is to create the best content possible and let people enjoy it the way they want. The world is moving in that direction.
Mr. Moonves wants his channel to remain relevant to a new generation of “never-wired,” people who never paid for a standard TV package and “cable cutters” who canceled their cable service.
The push towards web-only offerings by HBO and CBS, two networks that make billions of dollars in profits from the traditional system, highlights how quickly the balance of power is changing in the television landscape. The CBS All Access service, at $ 6 per month, debuted Thursday; details on HBO’s service, which is slated to start in 2015, are still unclear.
The initiatives are largely a reaction to the success of Netflix, whose popular streaming service has more than 50 million subscribers worldwide. Along with Netflix, a host of other insurgents like Amazon and Hulu are now offering on-demand programming that can be watched anytime and anywhere on a laptop or smartphone. New technologies, including “smart” TVs and streaming devices like Apple TV and Roku, also allow viewers to watch videos streamed over the Internet on a big screen.
Netflix chief executive Reed Hastings said in an interview that the new wave of traditional point-of-sale streaming options validates his company’s long-held belief that the internet is replacing traditional TV, apps are replacing channels. , remote controls were disappearing and screens were proliferating. He said increased competition would force Netflix to work harder, but also evangelize internet video.
“We are end-to-end internet disruptors,” he said. “We continue to push that edge.”
Media executives are eager to appeal to the growing number of viewers who pay for the internet but watch TV through cheaper streaming alternatives or free video options like YouTube and other social media. Growth in cable and satellite subscriptions has stalled, falling 0.5% to 101.4 million this year, from 101.9 million in 2012, according to SNL Kagan. Among people aged 18 to 34, about one in six said they had not watched any original TV series on a traditional TV in the past 30 days, according to comScore.
Take Jennifer Seide, 28, a Queens resident who watches at least four hours of television a day. She pays Verizon about $ 60 per month for Internet access, but does not pay for a conventional television subscription. She stays on top of the latest shows through an $ 8 per month Netflix subscription, a friend’s Hulu subscription, another friend’s subscription to HBO, and YouTube.
Ms Seide said she was delighted with the news this week. “With cable you get a lot of things, but it’s a lot of things you don’t want,” she said. “With the Internet, you can choose the shows you want.”
Sport is a major element that holds the wire harness together. Notably, the new CBS service does not include National Football League games. Network executives said they are in talks with the NFL and other live sports like March Madness are already available to stream.
Many viewers will continue to pay for cable or satellite due to live sports programming on ESPN and other networks, which pay sports leagues a lot of money for the rights to broadcast games. Live games are one of the few remaining types of shows that still have high ratings, and analysts say sports fans who want to watch them won’t be able to cut the cord. That said, a growing number of sports options exist on the web with a traditional pay-TV package, including ESPN3. And some sports leagues, like Major League Baseball, sell Internet subscriptions only to their games.
Networks that offer new streaming services must strike a delicate balance not to cannibalize the billions of dollars that cable operators and satellites pay them to broadcast their programming. CBS and HBO were careful to say that they would work with current and new business partners and that their new initiatives would not hamper their existing businesses. Some analysts were skeptical. New stand-alone web services could cause cable companies to demand that CBS and HBO charge lower fees for their programming. To conserve potential cable cutters, cable companies like Comcast and Charter Communications might be forced to create more segmented packages. But in some ways, the new web-only products could benefit cable companies, who make billions of dollars selling home Internet services. Netflix, and now CBS and HBO, needs broadband service to reach customers on the web.
CBS and HBO aren’t the only two new web-only offerings. Sony is preparing an Internet product that is expected to include programming from Viacom, the parent company of networks like Comedy Central, MTV and Nickelodeon. DirecTV also announced that it will launch an online video service. A similar service from Showtime, the premium cable network owned by CBS, is likely in the “not too distant future,” Moonves said.
It remains to be seen how many different web TV subscriptions viewers will pay, especially if the total exceeds the cost of a traditional cable package. Netflix starts at $ 8 per month and Hulu’s premium service costs $ 8 per month. An Amazon Prime subscription, which includes video streaming, costs $ 99 per year. But one thing is certain: viewers today have more power to create their own television packages.
CBS is an unlikely disruptor. It didn’t join rivals ABC, Fox, and NBC when they launched Hulu in 2008, for example. But it kept the digital rights to its programming so it could create its own web and mobile offerings, like CBS All Access. Subscribers will be able to stream local CBS TV channels in 14 markets, including Chicago, Los Angeles and New York, and more affiliates are expected to join. (People have long been able to watch TV networks broadcast for free through antennas.)
The CBS service will make episodes of current shows such as “The Big Bang Theory” and “NCIS” available on demand in all markets in the United States the day after they air, and more than 5,000 episodes of upcoming shows. ‘he calls CBS Classics as “Star Trek,” “Cheers” and “MacGyver.” (“Cheers,” although airing on NBC, is distributed by CBS Television.)
The commercials shown live will be the same as those shown on the traditional CBS broadcast. For on-demand programming, the 12-16 minutes of announcements per hour will be reduced by 25%. CBS Classics will air without commercials.
“It will be a lot like Netflix,” said Marc DeBevoise, executive vice president of CBS Interactive.