Ten owner CBS readies for Australian expansion

Josh McDonnell
By Josh McDonnell | 3 August 2018

The new owner of Network Ten, CBS Corporation, has revealed it is on track to reach eight million content subscribers in 2019 as the broadcaster plans to double that figure by 2022.

Speaking to investors today, CBS CEO Leslie Moonves said the company continued to "surpass expectations" for its digital subscriber base as it ramps up its over the top (OTT) premium content. He also stressed the importance of the company owning its own content, as well as producing local content in all markets.

"Based on our growth trajectory and the trends we see ahead, we are now predicting we will have 16 million subscribers from All Access and Showtime OTT by 2022," Moonves said on the call this morning (AEST).

"In other words, we plan to double our initial goal in just two years. That doesn't even include the subscribers we plan to generate internationally. We have had early success in Canada and we are now getting ready to expand into Australia."

In August last year it was revealed that CBS planned to buy Ten, as well as launch its subscription video on-demand (SVOD) platform 'CBS All Access' in the Australian market. The deal fuelled speculation about what this may mean for some of the streaming companies in Australia, who have already secured exclusive deals relating to Showtime and CW shows.

Stan holds the official content rights and branding licence to CBS cable TV production house Showtime in this market.

The long-term deal with one of the world's largest productions houses is a major part of Stan's offering, providing its subscribers with first run of hit shows like Billions, Twin Peaks and The Circus plus Showtime's extensive back catalogue.

See: CBS arrival poses 'no threat' to Stan's Showtime deal; CEO Mike Sneesby

CBS revenues for the second quarter of 2018 increased 6% to $US3.47 billion from $US3.26 billion for the same prior-year period.

Advertising revenues increased 3% from the same prior-year period, which Mooves said reflected the acquisition of Network Ten in the fourth quarter of 2017.

"During our second quarter our fast-growing revenue sources made up 62% of our overall revenue, meaning that only 38% came from advertising," Moonves says.

"The best part of that is that advertising also grew during the quarter, up 2%. So while advertising continues to become a smaller part of our total it remains an important part of our business."

The company also stated that ad revenue was offset by the Ten acquisition, which allowed the company to continue its growth in the area despite losing the rights to broadcast the Men's basketball Final Four Championship.

Whether the company will take a similar approach to premium content on OTT here in Australia remains to be seen, however, Ten has stated that local "premium content" will remain a focus going forward.

Yesterday, Network Ten CEO Paul Anderson told AdNews the move to bring sales in-house is all about making the broadcaster "accountable" for the monetisation of both revenue and cost.

The network recently revealed it would be ending its long-standing relationship with MCN, as CBS looked to remove itself from the "unusual situation".

"It's a different environment now with the new ownership structure and CBS would like us to be fully accountable for the revenue and the costs, which meant we had to change the current arrangement," Anderson said.

"The landscape is changing pretty quickly on how we are monetising that content, so being in control of that makes sense on a whole range of levels."

Also on the call, Moonves also refused to comment on the recent allegations of sexual misconduct. 

The CBS board of directors announced earlier this week that it had hired two law firms to investigate the allegations, after six women came forward with accusation that Moonves had made unwanted sexual advances.

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