CBS Bets on Streaming-Television Boom After Sluggish Quarter
(Bloomberg) -- With growth from traditional television slowing, CBS Corp. is stepping up its ambitions online.
The owner of Showtime and the CBS broadcast network projected that its streaming services would reach 25 million domestic subscribers by 2022, up from about 8 million now.
That would put CBS in the big leagues of streaming. Netflix, the world’s largest paid online TV network, has 58.5 million U.S. subscribers. Hulu, meanwhile, surpassed 25 million last year.
CBS’s fourth-quarter earnings, released Thursday, underscored the need to get more money from a new source: Earnings and revenue both fell short of Wall Street estimates. The company blamed the fourth-quarter shortfall on lower sales of TV shows produced by its studio.
A slowdown in the traditional pay-TV business has forced many of the world’s largest media companies to look online for growth. Walt Disney Co., AT&T Inc. and Comcast Corp. are all racing to introduce new streaming services.
CBS hopes an early start will give it an edge in the long run. The owner of the most-watched U.S. TV network has been building an audience for its All Access platform since 2014. The service offers original shows like “Star Trek: Discovery’’ and “The Good Fight,’’ and also carries live NFL games. CBS introduced an online version of its premium cable network Showtime in 2015.
“While others are just announcing their ambitions, we are hitting our stride,” acting Chief Executive Officer Joe Ianniello told analysts Thursday.
Ianniello said CBS plans to boost the number of original series released on All Access to 11 this year. Showtime, meanwhile, aims to increase its output by 30 percent. The also company may air reruns of shows from the streaming service on its broadcast network.
The rosy predictions for the company’s online services didn’t placate investors. Shares fell as much as 3.1 percent to $47.60 in aftermarket trading. They had climbed 12 percent this year through Thursday’s close.
Investors and analysts are still waiting to see if CBS and Viacom Inc. will renew their on-again, off-again merger talks. Ianniello declined to discuss the matter on Thursday.
©2019 Bloomberg L.P.