1. CBS Revenue Up Thanks To OTT

So CBS, one of those “dying” TV networks, announced that their revenues had actually gone up 3% in Q3. Among the bright spots were its two streaming services—CBS All Access and Showtime, which experienced 79% growth, while ad revenues grew 14%, including sales from Australia’s Network 10, CBS’s latest acquisition.

Why It Matters

TV isn’t dying. It’s changing and it’s managing to make money while it’s changing. CBS’s profits would have been higher, they noted, had they not been involved in all that nasty Moonves vs Redstone foolishness.

It’s significant too that most of CBS’s growth appears to be coming from their digital properties. While they frustratingly (well, frustrating for people like me who have to use those stats to divine the future) do not break down subscriber stats for CBS All Access vs Showtime, lumping both services together, they claimed to be “on pace” for hitting 8 million subscribers for the two services by next year, a big jump from the 5 million they recently copped to.

That’s a big advantage of their first-in strategy—CBS All Access is the first network OTT app, a response to the fact that CBS was not part of Team Hulu and so fans had no place to watch their programming. They were clever in that they threw in some originals too (“Star Trek”) with plans to produce even more.

But what’s truly notable is that at a time when so many observers dismiss broadcast television as a vast wasteland for the elderly and underfunded, they’ve somehow convinced 3 million people to sign up for an OTT service that shows broadcast TV. (Not discounting the possibility that Showtime could have 80% of those approximately 6 million subscribers, but it is unlikely.)

And while it’s great that CBS ad revenue went up, much of that is likely attributable to increased political spending: CBS’s owned and operated local affiliates are seeing a huge uptick in political ad spend that will continue through Q4.

The final reason CBS’s earnings matter is that the network seems to be doing okay post-Moonves. There was some fear that switching from the long-time leader would lead to problems, but interim CEO Joe Ianniello seems to have things under control, at least for now.

What You Need To Do About It

If you’re an advertiser, you might take another look at CBS All Access now that their subscriber base is growing. Bear in mind though, that as soon as the Three New Flixes (DisneyFlix, WarnerFlix and AppleFlix) come on the scene, all bets are off on those numbers, but you’ve got a good couple of months until that all goes down.

If you’re a competing broadcast network, bear in mind that CBS was first in and that they were not part of Hulu. That created both an advantage and a need, which combined to contribute to their success.

 

2. Crunchyroll Hits 2 Million Subscribers

Niche OTT service Crunchyroll now has two million subscribers. That’s a whole lot of anime fans, though it appears that Crunchyroll (which is owned by Otter Media, which is, in turn, owned by AT&T) is also looking to expand a bit beyond its base when it can.

Why It Matters

Niche content is a big deal. It’s the actual theory behind Facebook Watch—find niche audiences and make shows geared towards them—and it’s a sound theory if you bear in mind the one thing that Facebook forgot: shows actually have to be good, not just well targeted, if you want people to watch them.

BOOM!

Crunchyroll offers a great window into how niche services can become successful by playing to the superfan.

They sponsor cons (conventions to the less hip) and their second annual Crunchyroll Expo lured in 45,000 fans this year, 10K more than 2017. They’ve also made themselves a ubiquitous part of anime world, correctly gauging what would be considered okay by fans and what would be considered pushy.

Next up is original content and the occasional show that reaches out to a wider audience. (Easy to poo-poo it, but remember that at its heart, “Game of Thrones” is a show about magic and dragons.)

What You Need To Do About It

If you’re a network, advertiser or vMVPD and you’ve been thinking that “niche content” was just a polite way of saying “YouTube channel” think again—there are many solid niches out there and niche fans are loyal fans.

Provided the shows you create for them are any sort of decent, that is.