NEW YORK (TheStreet) -- In a TV network landscape becoming more crowded and fragmented, where Time Warner's (TWX) HBO, Netflix (NFLX - Get Report), Amazon (AMZN - Get Report) and Hulu drive much of the public chatter about programming, just where does CBS' (CBS - Get Report) Showtime stand?
Showtime has 23.1 million subscribers, a respectable number even if it does trail HBO's nearly 32 million subscribers. But according to SNL Kagan, Showtime fell to third place among premium TV networks at the end of 2014 when it was surpassed by Starz (STRZA), which is enjoying a resurgence fueled in part by the popularity of its hit shows Power and Outlander. Starz has 23.7 million U.S. subscribers, according to SNL.
Besides worries about losing ground to Starz in terms of subscribers, there's concern that Showtime's viewers aren't spending as much time watching the channel as they once did in part because of the ascendancy of Netflix and other video platforms.
"The odds are that Showtime viewing is fewer than 20 hours in those households that subscribe," said Michael Pachter, a media analyst at Wedbush Securities. "And probably less than 2% of all television consumed."
Meanwhile, Netflix is sucking more of the video watching out of the average household. Rich Greenfield of BTIG recently estimated that the average Netflix viewer streams two hours of programming a day, equal to 60 hours in a typical month. The popular streaming service added 900,000 new customers in the U.S. during the second quarter, boosting its domestic total to 42.3 million. Netflix has 65.6 million total subscribers, including those overseas.
To boost its own profile, Showtime earlier this month introduced an Internet offering also called Showtime. Like HBO NOW, Showtime's standalone digital service is available without a pay-TV contract and similarly targets the roughly 10 million U.S. homes that have an Internet connection but don't subscribe to pay-TV. It's also aimed at the additional 70 million homes that get pay TV but that don't get HBO.
"Most people view Showtime as replaceable by HBO, but it's the consensus No. 2 premium-pay cable brand," Pachter said. "It ranks right up there with Netflix, and its over-the-top service gives it a way to ensure that customers who don't want or have cable, or who cut the cord, can subscribe to Showtime anyway."
Showtime's Internet service went live on July 7, and sells for $10.99 a month. It can be accessed through the Apple (AAPL - Get Report) TV and Roku set-top box. Hulu subscribers can get a slight discount on Showtime’s service for $8.99 a month as CBS apparently cut a deal with Hulu's three-headed owner, Disney (DIS - Get Report), Comcast's (CMCSA - Get Report) NBC and 21st Century Fox (FOXA).
Showtime's entrance into the so-called over-the-top market was made in part to counter its longtime rival HBO which made a big splash in April when it launched its $15 a month Internet streaming service which has quickly grown to almost 1 million subscribers, according to BTIG.
"You have a service that's suddenly globally scaled," said Laura Martin, of Needham & Co., about Showtime's standalone TV offering. "You've taken your TAM [total addressable market] and doubled or tripled it by going over the top. As long as somebody will pay them, they haven't cannibalized their business model."
But to sustain its popularity and win subscribers to its standalone service, Showtime will have to continue to produce shows that compete with Netflix, Amazon Prime and the traditional cable-TV bundle.
And for better or worse, Emmy Awards are often the means by which quality programming is measured.
When the 2015 Emmy nominations came out last week, to no one’s surprise, HBO led the pack, with 126 nominations. Many of HBO’s nods came from its raft of documentaries and miniseries, but its hit series Game of Thrones led all series regardless of type with 24 nominations itself.
Among other networks and streaming services, ABC led the traditional broadcast networks with 42 nominations. Among other networks and streaming services, Netflix claimed 34 nominations, with its drama House of Cards, starring Kevin Spacey, receiving 11 nods. AMC (AMCX), home to The Walking Dead and the recently concluded Mad Men, got 24 Emmy nominations, and Cinemax and Starz each received five.
Showtime programs pulled down 18 nominations, a decline from the 31 Emmy nods the network picked up in 2014 and 32 in 2013. The most nominations for any Showtime program were the five received by the Claire Danes-led Homeland.
A Showtime spokeswoman countered that the network is more concerned with the quality rather than the quantity of its Emmy nominations. The network received 10 nominations for actors appearing in its shows, the most performers of any network, broadcast, cable or streaming service.
Those nominations included Liev Schreiber for best lead actor in a drama series for Ray Donovan, Matt LeBlanc for best lead actor in a Comedy Series for Episodes, and the aforementioned Claire Danes for best lead actress in a Drama Series for Homeland.
It’s not as if Showtime is a strange to Emmy wins. Both Danes and Damian Lewis won Emmys for their roles in Homeland in 2012, and Danes repeated her win in 2013. But James Marsh, a media analyst with Piper Jaffray, said the network still needs to work to improve its image in the public's eye.
"The Showtime brand is solid," Marsh said. "But still, it lags (in) the quality of its programming, and original programming is the critical success factor in today's evolving media landscape."