CBS Joins HBO, Launches Online-Only Subscription Service

On the heels of yesterday’s surprise announcement that HBO is creating an online-only, cable-free, streaming-access package in 2015, broadcast network CBS has announced that it, too, is joining the cord-cutting party.

As Re/Code reports, the service, CBS All Access, launches today and will run subscribers $6 per month. All Access works on web browsers or mobile devices, and has access to both live and on-demand programming.

However, there are several catches. NFL games (Sunday and Thursday night football) are not included. Nor are all recent programs available on demand; availability depends on the production company that made the show, and whether CBS’s contract with them includes streaming rights. And livestreams are, for now, only available in the cities where CBS directly owns and operates the affiliated station, which does not include several of the country’s largest media markets.

And paying CBS your $5.99 directly won’t spare you with ads: live-streaming content will have the same ads online that you would see on air, and on-demand programming of all currently-airing programs (so, a season 1 episode of a show that’s in season 7, say) will also play with ads.

As both Re/Code and the New York Times point out, this is a tricky needle for CBS to thread. Currently, they make oodles of money from the fees they get from traditional pay-TV (cable and satellite) companies. But to keep making oodles of money in the future, they need a way to reach up-and-coming generations of potential subscribers, too.

It’s impossible to hear CBS’s announcement without immediately thinking of Aereo, the on-demand streaming broadcast-TV service that more or less met its demise in the Supreme Court earlier this year, after being sued (repeatedly) by CBS and other broadcasters.

CBS was particularly hostile to Aereo, and threatened basically to take their ball and go home by leaving the airwaves and going cable-only if Aereo won their Supreme Court case.

As we all now know, however, Aereo lost that case earlier this year, and the broadcasters, including CBS, won.

But of course, CBS benefits directly from launching their own service in a way they would not from having their signals captured and streamed by Aereo: Nielsen can count and quantify All Access users, which allows the network to continue making money from ad sales.

The timing of CBS’s announcement, paired with HBO’s, brings a debate about the future of TV to the forefront. The future is clearly online, and has been for some time — but that future is suddenly accelerating.

Amazon, CBS, Hulu, Netflix, and HBO now all offer or soon will offer packages that offer not only access to streaming archive content, but also to their own original programming. Showtime is also considering an online package. Sony and Dish are working on over-the-top streaming services, and other major cable and satellite companies may soon join in.

The younger generations of so-called cord cutters now nearly have access to all of their preferred content online, but in a very fractured and fragmented landscape. Consumers skipping cable to avoid an extra $50 on their broadband bill are now faced with paying nearly that much to a half-dozen different services, and tasked with trying to figure out which content is available on which one.

A competitive landscape is good for consumers, but is also one ripe for future consolidation. Perhaps by the year 2025, DisViaNetHuAmazonFlix (a division of Comcast) will charge $50 per month for an all-you-can-stream online 100-channel bundle full of shows you never watch.

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