Les Moonves: Showtime Will Soon Launch A Direct-To-Consumer Streaming Service

“The days of the 500 channel universe are over,” as programmers begin to offer their products directly to consumers outside of the traditional pay-TV bundle, CBS chief Les Moonves told investors this morning at Deutsche Bank Securities 2015 Media, Internet & Telecom Conference. And Showtime will participate in the change by launching a product similar to the just announced $14.99 a month HBO Now “in the not-too-distant future.”

Moonves has been having conversations with “the normal suspects” including cable and satellite distributors who initially “were skeptical: is this going to hurt the business?” But now “there’s been a bit of interest – I think the floodgate is now open.” Indeed, “we got a number of calls yesterday from existing players and digital players that we’ve talked to in the past.… The content we have at Showtime is also premium. I don’t think there’s any way, shape, or form for anybody to look at [the launch of HBO Now] other than as a major positive for premium cable.”

And he is not worried that the potential acceleration of cord cutting will hurt CBS. “We are very different from the other three guys that have a lot of cable properties behind them. Our major brands are CBS and Showtime.” And as the top-rated network, “you can’t live without CBS.”

Moonves says he’s jazzed by what he’s seen so far at CBS All Access, his first subscription streaming service that offers live broadcasts to people who live around the network owned stations. He’s “close” to completing a deal with affiliates that will offer the same service “throughout the country within a few months.”

Here, too, he says that CBS has an advantage over other networks because it has not sold out of home streaming rights to any distributor yet. “If people want them, they have to renegotiate with us. We are offering All Access to all of our partners, and it is not at $5.99 [a month] to them.… That means our [retransmission consent] number is going to go up in each one of these markets because they’re going to have to pay a certain amount per sub to get these out of home rights which are becoming more and more important.”

The ever upbeat CEO is one of the few Big Media execs who seems enthusiastic about the ad market. “As of December, the marketplace improved, and it has continued to improve,” he says. Scatter market pricing is about 10% above last year’s upfront rates. And demand volume, “which is even more important, has gone up quite a bit.” He also approaches the upfront market in May “from a position of strength” because CBS’s ratings are up in most of its demos while “my major competitors are down, down, down, down.”

Meanwhile, Moonves expects his program expenses to remain under control this year – especially when Stephen Colbert replaces David Letterman at The Late Show. “Colbert is not going to cost as much as Letterman,” he says. Production costs also will go down because “David is unbelievably loyal. He wouldn’t fire anybody. So we have a lot of people there who were getting paid for not doing very much. People don’t know what a good guy he really is. The Colbert show will be a bit more economical.”

He didn’t directly address rumors about whether CBS might combine with Viacom – which Viacom CEO Philippe Dauman shot down this week. But Moonves says that CBS doesn’t have to grow to match the clout of distributors including Comcast (with its pending deal to buy Time Warner Cable) and AT&T (with its pending deal to buy DirecTV).

“Yes, they’ll be stronger and more powerful.” But “I feel like we have quite a bit of clout right now. They can’t live without us, and we can’t live without them. Whether we are negotiating with Comcast alone, or Comcast that now includes Time Warner Cable, I don’t see the world as any different. I don’t see any way that we can consolidate in the near or distant future unless it’s under terms that are really favorable to us.”

This article was printed from https://deadline.com/2015/03/les-moonves-showtime-will-soon-launch-a-direct-to-consumer-streaming-service-1201390510/