CBS, one of the four largest US public broadcasters, has introduced a bundle of its two subscription Video on Demand (SVoD) products – CBS All Access and Showtime, priced at either $14.99 or $18.99 (depending on whether the subscriber chooses the ads-included or ad-free version of CBS All Access). The bundle will offer a $2 discount overall compared to the price of taking both services individually. This discount is attractive for those already taking just one of the services. For instance, for the 60% of Showtime subscribers who don’t take CBS, the new bundle would allow them to add CBS All Access at an entry price starting at just $3.99 per month.
CBS All Access currently has around 1.7m subscribers, of which nearly 40% also subscribe to Showtime. Thus, with around 700,000 subscribers taking both services, the new bundling discount means that CBS could lose out on around $1.4m of revenue per month. To recoup the lost revenue, CBS would need to attract roughly 100,000 new non-CBS subscribers to the bundle.
A potential addressable market is DirecTV Now and Sling TV subscribers; These services failed to secure carriage deals with CBS, meaning that CBS’s OTT services are the only way for these subscribers to live-stream CBS channels.
Ampere's research into catalogue compositions of these services suggests that Showtime had more than 2,000 hours of content in March 2017, while CBS All Access had close to 9,000 hours, giving a bundled subscriber access to around 11,000 hours of content.