Showtime Networks' Market Share Growth Important for CBS

 |  Includes: CBS, TWX
by: Trefis

CBS’s Showtime Networks constitutes about 18% of CBS’s stock. The premium TV network consists of premium channels like Showtime, Flix, The Movie Channel (TMC) and Smithsonian Networks. Showtime competes with other premium channels like Time Warner’s (NYSE:TWX) HBO which we estimate accounts for about 24% of Time Warner’s stock. In comparison, we estimate that CBS’s broadcast network constitutes about 34% of CBS’s stock and the cable channels owned by Time Warner (TNT, TBS, CNN) account for about 24% of the company’s stock.

Showtime Networks’ premium TV channels offer a variety of programming to cable and satellite subscribers in the US who pay additional monthly premiums for accessing these channels. Below we highlight why we believe Showtime Networks (Showtime, Flix and The Movie Channel) will continue to increase their premium TV market share.


Showtime premium TV market share has stagnated around 27%-28% in the last few years due to direct competition with HBO. However, we believe Showtime will be able to improve its penetration driven by its online offerings, including on-demand content as well as successful original programming that will help it attract its viewers once again.

We expect Showtime’s market share to reach around 35% by the end of Trefis' forecast period.


We estimate that Flix’s premium TV market share has increased from about 36% in 2005 to more than 40% in 2009. We expect it to gain share and reach about 47% by the end of Trefis' forecast period.

Our expectation of continued increase in Flix’s penetration is based on following factors:

  1. Improving economy will help subscribers to subscribe to more premium channels
  2. Flix differentiates itself from other channels by airing classic movies, and this has attracted viewers in the past. We expect this differentiation will continue to attract viewers in the future.

The Movie Channel

We estimate that The Movie Channel’s premium TV market share has increased from about 27% in 2005 to about 34% in 2009. Going forward, we expect it to continue to gain market share and reach 40% by the end of Trefis' forecast period. With differentiated offerings of Indie movies and classics, we believe TMC will sustain its historical growth rate.

You can modify our forecasts above to see the impact on CBS’s stock price if the market share gains for Showtime Networks were to increase more than we forecast.

For additional forecasts and analysis, here is our complete model for CBS’s stock.

Disclosure: No positions.