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CBS’s Original Programming Strategy: Must-Knows

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Original programming for CBS All Access and CBS Showtime

CBS (CBS) is targeting $800 million in revenue over the next five years from its OTT (over-the-top) services, including CBS All Access and CBS Showtime. As part of this strategy, the company will also begin streaming the first of its original series, Star Trek, on CBS All Access from January next year.

Star Trek will stream on CBS All Access and will also be available on CBS Television Network. However, the subsequent episodes of the series will be available exclusively on CBS’s streaming platform, CBS All Access. CBS plans to ramp up its original programming for CBS All Access and plans to add three to four original series each year.

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The company stated on its fiscal 1Q16 earnings call that it would like to go beyond its original series on its CBS Showtime OTT platform, about 12 a year. But CBS also said that, even in the face of rising competition from Netflix (NFLX) and Amazon Prime Instant Video service (AMZN), subscribers have increased for CBS Showtime. The company also expects a rise in subscribers for its OTT platform in the next few months.

CBS also indicated that the quality and rising popularity of its original programming was clear in Showtime television network’s top rank among premium networks in three out of the past four quarters.

Original programming spending among peers

According to a Bloomberg Business report citing data from MoffettNathanson, and as the above chart indicates, while Netflix is expected to spend around $5 billion on original programming, Time Warner (TWX) is expected to spend $4.6 billion on original programming. In contrast, Discovery Communications (DISCA) and the Walt Disney Company (DIS) are expected to spend less on original programming at $2 billion and $2.8 billion, respectively.

Time Warner has also stated that it has a content budget of $2 billion a year for HBO. Around $1 billion of that is for original programming. The company also stated that HBO is targeting around 600 hours of original programming this year.

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