For consumers, ViacomCBS Inc.'s streaming service CBS All Access is typically a product added to a traditional cable TV packages, so its recent renewed carriage agreement with Comcast Corp. is an important part of the platform's distribution strategy.
About 79% of CBS All Access customers subscribe to a multichannel video package, so the platform is "effectively a premium add-on" to existing video bundles, said Marc DeBevoise, chief digital officer of ViacomCBS, during a Jan. 8 panel discussion at CES 2020, the Consumer Technology Association's annual technology and media trade show. The Comcast carriage deal, which will offer CBS All Access on Xfinity X1 and Flex boxes later in 2020, marks the first multichannel set-top box distribution agreement for the platform. Flex is a streaming product made available through a set-top box tailored to Comcast internet-only customers.
The deal comes as the traditional TV business is shrinking. According to Comcast's most recent Form 10-Q filing, the company has 20.4 million residential video subscribers; a year prior, it reported about 21.0 million residential video subscribers.
Nevertheless, DeBevoise said that distribution channel is not going anywhere, and the streaming universe is not a zero-sum game. ViacomCBS predicts that the streaming subscription business will grow by 200 million over the next three to five years, more than doubling from about 180 million today. While more and more companies are launching streaming services to compete with legacy platforms owners, such as Netflix Inc. and Amazon.com Inc., no one platform will soak up all that growth.
"I liken it to a rocket ship that's leaving for the next planet," DeBevoise said. "Do you have the assets and the value proposition for the consumer to get to that next planet?"
According to the executive, ViacomCBS' various branded mobile and desktop platforms carry about 200 million users.
"Combined, we are now the 6th-largest internet company in the United States," he said.
As of its most recent calculation, the company has seen 60% growth in CBS All Access subscribers and 100% growth in consumption year over year, he said. On churn, he said about 20% of sign-ups in November and December 2019 were re-signs. He credited the CBS All Access original-content strategy as a primary driver for growth. CBS All Access has grown its originals volume from three shows in 2014, when it launched, to seven shows in 2019. It will offer 14 original shows in 2020, he said.
The company has forecast for 25 million subscribers across CBS All Access and Showtime's streaming platform by 2022.