How Will The CBS-NFL Deal Help CBS Grow In Near Term?

December 2nd, 2016 by Trefis Team
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CBS (NYSE:CBS) announced a multi-year deal to stream the ongoing National Football League (NFL) season on CBS’ subscription service (CBS All Access) on Thursday. According to this deal, CBS All Access subscribers would be able to stream all NFL on CBS games, including Thursday night football on CBS, as well as pregame and halftime coverage live on CBS All Access platforms in more than 150 markets across the U.S. starting Sunday, December 4. [1].

CBS All Access will allow users to sample content from NFL Game Pass, the NFL’s digital video subscription service which makes games and other programming available on-demand. Moreover, the NFL feed is available on Twitter, which owns the rights to stream the Thursday night games for the 2016 season. However, NFL on CBS All Access would continue to be blacked out on mobile phones as Verizon (NYSE:VZ) wireless retains an exclusive contol of streaming NFL on mobiles (including CBS feeds). Interestingly, the CBS-NFL deal comes one day after the official launch of DirecTV Now, the internet TV service from AT&T (NYSE:T) that misses out on CBS networks completely.

While most of the broadcasting networks are going through tough times with declining ratings amidst growth of digital platforms, CBS’ over-the-top (OTT) subscription services, CBS All Access and Showtime OTT, continue to be key contributors to the company’s growth. CBS expects its OTT subscribers to grow to 8 million by 2020, bringing $800 million in additional revenue. [2] CBS is likely to see steady growth in its revenues in the near term due to stable ratings from sports programming. It is also seeing growth in scatter pricing, which should boost advertising revenues going forward.

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CBS All Access

CBS launched CBS All Access, priced at $5.99 per month ($9.99 with the no commercials option), which allows users to view past and present episodes of CBS shows. In addition to providing full-length episodes of CBS programs, the service also allows live programming streams of local CBS affiliates in almost 75% of the U.S. CBS All Access has already crossed 2 million subscribers since its launch.

The streaming of NFL on CBS All Access is a significat step in CBS’ digital strategy. In 2017, we expect CBS All Access subscribers to increase further due to the additon of NFL streaming and launch of new original programming content to its portfolio.

See our complete analysis for CBS Corporation 

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Notes:
  1. NFL games coming to CBS All Access starting Sunday, cbsnews.com, Dec 1 2016 [↩]
  2. CBS Predicts 8 Million Subscribers for CBS All Access and Showtime Streaming Services by 2020, variety.com, March 2016 [↩]