While ABC recently announced a two-month experiment with streaming four shows online in a fully ad-supported model, CBS has been quietly testing different pricing strategies for online re-airs of Survivor at CBS.com.
For most of the season after each network airing, CBS made that week’s episode available for $1.99. But recently, CBS lowered the price to 99¢ and added advertisements into the stream, making the move without any marketing or promotion. "We’re just testing things out," says CBS Digital Media President Larry Kramer.
Declining to disclose specific figures, Kramer says the move has increased downloads. "It hasn’t been a massive change, but the numbers are a bit higher," he says. "And we didn’t get a lot of kickback because there were ads."
Kramer also says CBS may look at a completely ad-supported business model, charging users nothing in exchange for watching ads they cannot skip. "We want to work with the affiliates to test every model," he says, "and ad-supported is definitely one of those."
That model gave CBS more than $4 million in ad revenue from online airings of this year’s NCAA men’s basketball tournament games. After making the games available free, the "March Madness on Demand" Webcasts drew about 5 million users, roughly double the number CBS had projected.
And while the next tournament is nearly a year away, CBS is already holding meetings to discuss how to increase revenues for its online coverage of March Madness. It will undoubtedly see a leap in ad revenues based on the number of users this year.
"We charged conservatively based on a lower base; we did not build in the ability to charge more because more people came," says Kramer. "It should make a lot more money next time because we have experience with how many people watch and how much time they will spend."
Many viewers who logged onto CBS.com during the tournament this year were forced to wait when too many users logged on at the same time. Kramer says one option would be to offer a premium service where users could pay a fee to guarantee immediate entrance into the Webcast of their choice.