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CBS to add sports OTT service this month, 'Entertainment Tonight' entry in fall

With the CBS All Access and Showtime OTT products continuing to outperform expectations, and digital news offering CBSN gaining more traction, CBS Corp. is poised to launch a direct-to-consumer sports highlights product later this month and another streaming service tied to the "Entertainment Tonight" franchise this fall.

CBS Chairman and CEO Les Moonves on the company’s Feb. 15 earnings call told analysts that CBS Sports HQ will debut later this month, just before the "March Madness" college basketball tournament tips off, and ahead of The Masters golf tournament.

Moonves said CBS Sports HQ will proffer round-the-clock news highlights and analysis "in a unique way. We believe we can build a significant audience by launching an ad-supported free service with full mobile and on-demand capabilities. More importantly, we're setting ourselves up to the direct-to-consumer future with another vertical that is right in our wheelhouse."

Moonves said that is also the case with "Entertainment Tonight" streaming service, slated to bow this fall. "There is a tremendous appetite in the marketplace for entertainment news. And here again, we'll be taking advantage of one of our marquee brands and launching it on a new platform, where we can take advantage of better economics and bring in new viewers."

The executive pointed to the success CBSN has enjoyed in terms of attracting young viewers, with 80% of the audience between the ages of 18 and 49 and the average age in 38.

He said the game plan also calls for CBSN, CBS Sports HQ and the "Entertainment Tonight" product to cross-promote all of the company's direct-to-consumer services, "converting viewers in our ad-supported platforms into paying subscribers."

Meanwhile, the CBS All Access and Showtime entries have reached the 5 million-subscriber plateau. Moonves said the split is essentially 50-50 at this juncture and the performance gives the company "great confidence that we will more than exceed our goal of 8 million subs combined by 2020."

He said the "services give us our highest subscriber rates and a direct relationship within our consumers as we collect increasingly available data about our audience. Delivering these services over-the-top also allow us to attract the next generation of viewers with an average age that's approximately 20 years younger than those who watch broadcast in cable television."

The company is also eyeing international direct-to-consumer expansion beginning in June, "when we expand All Access into Canada, followed by Australia and then Europe and beyond as well," Moonves said.

Calling 2017 a breakout year for CBS All Access, Moonves said it doubled its subscriber base year over year, while January represented its best month to date. Subscriber growth, he said, is being driven by content, including the NFL, the Grammys, 10,000 library episodes, as well as original series "Star Trek: Discovery." The sophomore season of "The Good Wife" spinoff, "The Good Fight," will premiere in March. "String Angels" from acclaimed director/producer Ridley Scott and a mystery-thriller, "One Dollar" are also on tap.

The success of the OTT entry in conjunction with the linear product "led to a huge year at Showtime," which surpassed the 25 million-subscriber plateau for the first time. Moonves said 2017 marked Showtime's best year ever in terms of revenue from subscription growth.