When CBS chief Les Moonves appears at an investor event like this week’s UBS Annual Global Media and Communications Conference, they should just get him an orchestra and a spotlight so he can sing “Everything’s Coming Up Roses.” “Everybody calls me a cheerleader but network television’s doing better than it’s done in many years,” he told analysts today. He says that CBS’ prices for ads in the scatter market are up “in the mid-teens” over the upfront, although “our competitors are doing not as well.” Heading into the holiday season “demand is picking up again” and few are cancelling upfront orders for early 2012. “When you look at where our ratings are, you don’t want to cancel a CBS show because (later on) you’ll pay more.” To underscore his confidence in CBS’ finances, he threw some red meat to investors: “Could we raise the dividend (next year)? That’s a possibility.”
He’s encouraged by the additional dollars flowing to the network from retransmission consent deals with pay TV distributors, and reverse compensation payments to CBS from its affiliates. If a local station balked at shelling out cash to CBS — which used to pay stations to carry its shows — then Moonves would consider yanking the affiliation agreement. But he says that’s unlikely because CBS’ strong primetime line up “is making them a lot of money” by delivering large audiences to local newscasts. Meanwhile, he’d like the FCC not to require that network programming remain on pay TV when distributors balk at retransmission consent payments. “This is America. We’ll make a deal with these guys or won’t make a deal.”
Speaking of deals, Moonves says he’s pleased to sell shows from the CBS library to online streaming services including Netflix. “The future looks extremely bright for this revenue stream to go on forever.” While he says that he considers exclusivity to be “a dirty word,” he now views Netflix as “more friend than foe. We’re rooting for them to expand.” But he won’t turn over CBS’ new shows. “Those are the family jewels. Those are the engines that drive the majority of our revenue.”
He’s also upbeat about sports. He says that CBS will bid for the NFL, and the price will rise. “It should go up. They’ve delivered. … They’re great partners.” But Moonves adds that he’s “not looking to expand” into other sports. He might need a lesson in basketball, though: He called CBS’ joint deal with Turner for NCAA championships to be “a home run.”
But Moonves mostly credits entertainment programming for his bullish forecasts. “There’s no question that success breeds success.” With its large audience, CBS has a strong platform to promote new shows and focus on just a few at a time. “If you have to take eight or 10 shows and throw them against the wall it’s harder to be strategic.” It also emboldens execs to refresh their schedules, he says, noting that “it’s much better to cut a show a year early than a year late.” For example, CBS cancelled Without A Trace even though it was still moderately successful in its eighth year in order to take a chance on The Good Wife. “It’s much easier for us to do this because we’re successful,” he says.
Showtime is in a slightly different situation. “We’re still Avis (against HBO) and trying harder, but the gap has closed.” But the premium channel is making headway with what Moonves calls water-cooler shows. He says he’s “very excited” about the upcoming series House of Lies. For now, at least, the CBS chief says he isn’t worried about seeing a mass of pay TV subscribers cut the cord. Given the quality of shows on cable, “I don’t think it’s a possibility to make a significant inroad right now.” He adds, though, that “it’s a possibility we’re prepared for.”