American TV channel CBS launched their streaming channel over the summer called CBS All Access. The service is only $4.99 a month, but that is supported by commercials. In an effort to become more competitive with companies like Hulu, 24/7 Wall st. reports that CBS is contemplating a commercial free version. CBS head Les Moonves states the advertising value for streaming is similar to the rates used by Hulu.
Studies show that a portion of the public does not like commercials is willing to pay more for the ability to watch commercial free. If we use the suggested model, both Hulu and CBS suggest that the value of commercials is equal to rough $4 dollars a month additionally. If the other streaming companies use this model, it is possible we could see other ad based services offer an alternative for more than the normal rate.
The question is, will consumers be willing to pay more for the channel? For the group referred to as cord-cutters, the extra cost may be prohibitive. If the channel only offers a premium version, channels like NBC’s Seeso may lose out. Other surveys show that a majority of the public would agree to watch commercials if it meant a reduction in price.
All of this means that streaming channels have a choice to make. By only offering a premium service, it seems likely they would lose viewers. If people spend a set amount on their TV budget, with a few exceptions, many viewers would opt to go for the more reasonably priced service. That may give viewers the option to add another streaming service. Though $4 a month may not be much to the executives at the station, that amount can add up quickly. The wise thing to do would be to offer both services, and let the viewer choose how they wish to watch, instead of making the decision for them. If you would like watch channels like CBS All Access outside of the US, be sure to check out our SmartDNS list.
