ViacomCBS Accelerates Plans for Revamped CBS All Access Amid Pandemic

'Major changes' to service will debut this summer as company takes a hefty Covid-19 ad revenue hit

A photo of Bob Bakish and the ViacomCBS logo
ViacomCBS CEO Bob Bakish said the company's streaming properties saw record-breaking growth this year. - Credit by ViacomCBS
Headshot of Kelsey Sutton

In February, ViacomCBS CEO Bob Bakish first teased a bulked-up subscription streamer from the company that would build off the existing service CBS All Access. Amid a nationwide surge in streaming interest during the pandemic, that revamped and rebranded service will arrive sooner than anticipated.

The “transformed product” will begin to materialize sometime this summer, Bakish told investors on an earnings call today that also touched on the hefty ad revenue hit the company is taking as a result of Covid-19.

“We’re accelerating our plans for an expanded subscription service building off CBS All Access, with major changes coming this summer as we track towards the rebrand and relaunch of a transformed product,” Bakish said.

Many of the details about the rebranded service remain under wraps, but it will feature a heavier investment in original programming, along with library titles from the film studio Paramount along with linear brands BET, Comedy Central, MTV, Nickelodeon and Smithsonian. A revamped user interface, one highlighting franchises, live sports and news offerings along with on-demand offerings, will accompany the refresh, according to Bakish.

“Audiences want entertainment on demand and news, sports and events live,” Bakish said. “We’ll be the service that gives them what they want, how they want it, all in one place and at a great value. This will be a compelling foundational service for some and a differentiated complement for others.”

The move to make CBS All Access into a “much more compelling service,” Bakish said, comes amid record-breaking streaming growth across the board. At ViacomCBS, Domestic streaming and digital video revenue, comprised of both subscription revenues and digital video advertising, was up 51% compared to a year ago, to $471 million, ViacomCBS chief financial officer Christina Spade said.

CBS All Access and Showtime, both of which expanded seven-day free trials into 30-day offerings to capitalize on captive audiences at home, saw records in sign-ups and hours streamed, the company said. Those two services had a combined 13.5 million subscribers—a 50% year-over-year increase—at the end of the quarter, and Bakish said that Showtime’s conversion from free to pay was “the same or better” than before the expanded free trials.

Pluto TV, the free streamer that Viacom acquired in 2019 prior to its merger with CBS Corp., had more than 24 million monthly active users at the end of the quarter, a 55% year-over-year increase.

“The appeal of our streaming and digital offerings has been made even more clear over the last six weeks, where we’ve seen a strong acceleration in momentum across both free and paid as audiences follow stay at home guidelines,” Bakish said.

As the company pushes further into streaming, it will look to leverage Pluto TV’s free offering to promote paid subscriptions. Beginning in June, clickthrough ad units will begin appearing in Pluto to allow users to subscribe to CBS All Access and that integration will continue even as ViacomCBS readies the revamped and rebranded All Access service. (The company has already begun experimenting with cross-promotion when it made the first episode of the All Access original series Star Trek: Picard available for free on Pluto TV.)

“The Pluto TV platform is powerful and the world is quickly embracing it, but you shouldn’t think of it as just a standalone service,” Bakish said. “It is also key to our integrated streaming strategy, where it will serve as an important complement to, and funnel for, our pay services.”

The company is also eyeing an international streaming opportunity, and will debut a new global subscription streamer in the next 12 months. ViacomCBS is projecting 16 million combined subscribers to All Access and Showtime OTT by years’ end and 30 million monthly active users on Pluto TV.

Pandemic-related ad revenue hits

The emphasis on streaming comes as other portions of the business faces a tougher future amid the pandemic and the economic devastation left in its wake. Theatrical revenue dipped 3% in the quarter, although licensing and home entertainment revenues were up, and the company has moved several theatrical releases to later in the year and into 2021.

Meanwhile, advertising revenue in ViacomCBS’s television entertainment segment decreased 30% year over year—a loss of $586 million—as live sports dried up and advertisers pressed pause on some investments amid Covid-19.

The ad sales picture is “not pretty,” Bakish said, but the company is prepping a return to live sports with some golf and alternate programming. The company, which this week announced a revised two-day upfront plan for later this month, is anticipating an upfront season that is “later and longer than normal,” but expects a return in spend since the company largely serves national advertisers, not local ones.

“We know there will be a significant impact on ad sales in Q2, but based on what we’re seeing today, we believe there will be an improvement in advertising in the third and fourth quarters, assuming businesses begin to reopen at scale,” Bakish said, adding that the company is seeing a stronger scatter market in May and June than it did in April.

However, several TV ad sales executives recently told Adweek that they worry the worst Covid-19 ad revenue losses are still to come.

@kelseymsutton Kelsey Sutton is the streaming editor at Adweek, where she covers the business of streaming television.
Publish date: May 7, 2020 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT