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Ad-free version of CBS All Access popular with early adopters, exec says

Many subscribers of CBS All Access are paying extra for the streaming service's advertising-free option.

CBS Corp. President and acting CEO Joe Ianniello, speaking March 12 an industry conference, said that over one-third of CBS All Access customers have opted for the ad-free version of the subscription service, which retails for $9.99 per month versus the $5.99 subscription access that contains commercials.

Ianniello said over time the $4 monthly price point differential may prove to be even more valuable "for those who can't afford that."

"So we're going to track that over time. But right now, the early adopters certainly prefer the ad-free," he said. CBS has accelerated its guidance to have a combined 25 million CBS All Access and Showtime (US) over-the-top subscribers by 2022, up from 8 million today. All Showtime subscriptions are currently ad-free.

The company is also analyzing when subscribers "pause," rather than fully drop or "churn" from their direct-to-consumer subscriptions. "We're able to see when people come in and come out. We don't pull when somebody cancels a subscription, we don't call it churn; we call it pausing because they come back," he said, adding that subscribers return when NFL games or new original series become available on CBS All Access, and new shows and seasons arrive on Showtime.

On the international streaming front, Ianniello said the company will be rolling out CBS All Access to markets beyond Canada and Australia "in the coming months," without specifying locales.

While the product in Canada is similar to what is offered in the U.S., the Australian version, where CBS owns Ten Network Holdings Ltd., offers some local content. In marketing the service abroad, Ianniello believes the company should not export the U.S. entry, but couple it with local fare. "I think the offering is more complete," Ianniello said of the strategy. "The audiences or the subscribers you can get are much greater."

Relative to upfront ad-selling negotiations for the 2019-2020 TV season, Ianniello said CBS will approach the discussion with "stability and consistency" in its programming, which has made CBS the most watched network for 11 consecutive years.

He said the company is amenable to working with clients interested in running 6-, 15- and 30-second spots, but is not looking to reduce its ad load like some other programmers, including NBCUniversal Media LLC. "We'll experiment with all that, but we've not changed our ad load; for a 30-minute show, it's 8 minutes of commercials, 22 minutes of content," Ianniello said. "That's been tried and tested, and we haven't really deviated over years."