How Showtime's New Streaming Service Is Different (and Not) From HBO

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Matt Blank

Unlike its rival, Showtime has not struck an exclusive distribution deal and seems bent on making its $10.99 monthly service available on as many platforms as possible.

This story first appeared in the June 19 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

Don't call Showtime's new standalone streaming service a me-too product.

Unlike rival HBO, which launched HBO Now with Apple, Showtime has not struck an exclusive distribution deal and seems bent on making its $10.99 monthly service available on as many platforms as possible. Apple, Roku and PlayStation Vue had signed on at press time.

And while Showtime is owned by CBS Corp., CEO Matthew Blank says its product is different from the flagship network's digital offering, though he doesn't rule out joining forces. CBS Corp. CEO Leslie Moonves is "a huge supporter of our Showtime strategy," says Blank, who adds he would "be open" to bundling his soon-to-launch OTT service with the $5.99-a-month CBS All Access if "it made sense for us."

With its streaming business, Showtime will take on OTT players such as Netflix and Amazon that collectively will take in more than $6 billion in revenue in the U.S. in 2015, according to PricewaterhouseCoopers.

Despite Showtime entering a crowded market, analysts seem confident the channel, which has about 24 million TV subscribers, can attract a meaningful number of subs to its digital offering. Morgan Stanley's Benjamin Swinburne estimates the service will have as many as 2 million subscribers by the end of 2016 and notes the economics of streaming are better than those of traditional TV. If all of Showtime's TV subscribers switched to the OTT service, he says, it would add $550 million in revenue for CBS.

With its new service, Showtime is targeting the 11 million U.S. households that pay for broadband Internet but not television as well as the cable subscribers who do not pay for premium channels, which amounts to another 90 million or so U.S. households. "This is an opportunity to go after all of those audiences," says Blank.

Showtime plans to offer "hundreds of hours" of programming but could fall short of the $14.99-a-month HBO Now; Showtime's current Anytime service offers about 100 fewer titles than the HBO equivalent. But Showtime's OTT service will carry all of its original series, even though, unlike HBO, it doesn't own many of its shows. "We have all the same rights that we have for Showtime as you know today," says Blank. "We've been anticipating this for years, and the deals we have all include [streaming]."

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