Cablevision Plays Up OTT in CBS Retrans Deal

Further promoting its broadband-first image, Cablevision has announced that it will begin offering CBS All Access and Showtime's over-the-top video service to its Optimum Online subscribers.

The deal comes as part of a multi-year distribution agreement with CBS Corp. (NYSE: CBS) that includes broad retransmission rights for CBS broadcast stations and networks, including Showtime, CBS Sports Network and Smithsonian Channel. Financial details of the agreement were not disclosed.

Cablevision Systems Corp. (NYSE: CVC) has been vocal this year about its emphasis on broadband services over traditional cable TV. It was the first cable operator to begin reselling Hulu, and it debuted new cord-cutting packages in the spring that combine Internet service with an over-the-air TV antenna. (See Cablevision Embraces OTT With Hulu.)

CEO James Dolan has also repeatedly talked about transitioning from a cable company to a "connectivity company," and has even likened the video business to the need to sell eggs and milk in a convenience store. "You have to have it, but you don't make a lot of money on it," he said. (See Cablevision Talks Up Internet in Q1 Earnings.)

However, while the distribution of CBS's OTT products is another data point in Cablevision's broadband-first strategy, it's not clear how much value the new deal will deliver to consumers. Both CBS All Access and the online Showtime service are already available through other distribution channels for monthly fees of $6 and $11 respectively (Hulu Premium subs get a $2 discount). Cablevision isn't sharing details on its own pricing yet; but if earlier decisions to resell Hulu and HBO Now are any indication, there's no reason to believe Optimum Online customers will get a cheaper price by bundling the CBS OTT products with Internet service. If that's the case, then the only benefit will presumably be a single invoice for broadband and video.

Ironically, bundling broadband and video on a single bill is the same value proposition that cable companies have promoted for the last decade and a half.

It seems the more things change, the more they stay the same.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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