Opinion: CBS joins HBO in chase for cord-cutters

HBO grabbed headlines this week with its plan to offer a stand-alone streaming service next year, with details yet to come. Meanwhile, CBS is actually launching one.

The Tiffany Network launched the CBS All Access service Thursday, providing online and mobile access to live streams from local CBS-owned stations in Los Angeles and 13 other cities, as well as on-demand access to 15 current prime-time shows and numerous “classics” (e.g., “Star Trek” and “Cheers.”) The cost is just under $6 per month.

This is the most direct play yet by a broadcaster or cable network for viewers who are forsaking the costly bundles offered by pay TV in favor of movie and TV services sold online, such as Netflix and Hulu Plus. One of the main pieces missing for these “cord cutters” (and “cord shavers” and “cord nevers”) has been live over-the-air TV, a gap that such enterprising companies as Aereo and Ivi tried to fill before being stopped by the courts for infringing copyrights.

Not that live streams haven’t been available -- they have, particularly for special events such as the Olympics. But broadcasters often restrict those streams to viewers who are pay-TV subscribers, freezing out cord cutters.

The antipathy toward stand-alone streaming services stems in part from the broadcasters’ belief that providing live programs online would draw viewers away from their TV sets, cutting into their advertising revenue. But as CBS has shown with its March Madness streams, the online audience consists mainly of people who can’t watch a program on a TV. In other words, these viewers offer the networks the potential to grow their audience, not just shift it from one screen to another.

CBS All Access has several factors working in its favor. Its stations carry some coveted sports programming, including the NCAA basketball tournament and the Masters. (Sadly, the network doesn’t have the right to stream the NFL games it airs on Thursdays and Sundays.) It has drawn more viewers than any other network in the young fall season. And it is the first broadcaster to stream all its programming live, albeit in a limited number of markets.

On the other hand, fans of shows on Fox, ABC, NBC and the CW may not be thrilled with the idea of paying for live access to just one of the major broadcast networks. Consumers may also wonder whether it’s worth paying $6 a month for a live stream when so much of CBS’ programming is available for free after a short delay. And there’s no ability to record programs, so if you miss a show that’s not available on demand, you’re out of luck.

For an apartment dweller who can’t tune in programs with an indoor antenna, or for those who want to watch TV on a laptop, tablet or smartphone wherever they happen to be, the attributes of CBS All Access may be enough to overcome the limitations. But the price and the elements missing from the offering will make it less than compelling to the average cable subscriber.

Then again, All Access doesn’t strike me as an attempt to persuade people to cut the cable cord. Instead, it seems more like a toe-in-the-market test that’s designed not to undermine CBS’ ability to extract fees from pay-TV providers, while gauging the network’s value to those who’ve already abandoned (or never had any interest in) pay TV.

The latter audience is relatively small but growing. You might think that TV networks, like any other content provider, would want to make its product available to as many people as possible, and so would rush to develop services like All Access. But several factors have deterred them from offering live streams online: the need to license the streaming rights, the fear of reducing the licensing fees they can obtain from pay-TV operators and the concern that advertisers won’t pay as much for a commercial shown to a viewer online as they do for those shown over the air.

With Nielsen now able to track online viewers, the latter concern should be fading. Besides, it’s far easier to skip a commercial on an over-the-air broadcast (that is, after all, why God invented TiVo) than it is on a stream. And by setting the price for All Access higher than what it charges pay-TV operators, CBS isn’t putting the latter at risk.

Once the other major broadcasters finally embrace live streaming as a stand-alone product, CBS’ $6-a-month fee isn’t likely to be sustainable. Consumers can’t be expected to pay that much a month for each network, in addition to the fees demanded by such popular over-the-top offerings as Netflix, Hulu Plus, Amazon Prime and, presumably, HBO. Eventually, the market will need to offer an affordable bundle of broadcast channels. At this point, however, there’s only one broadcaster serving cord cutters, and that’s CBS.

Follow Healey’s intermittent Twitter feed: @jcahealey