An Upbeat Les Moonves Sees Bright Spots For CBS Almost Everywhere, Lauds Netflix


Les Moonves, chairman and CEO CBS Corp., was upbeat about almost everything as he faced the Goldman Sachs Communacopia conference Tuesday in New York. Digital services are meeting or beating expectations. The network is solid. Retransmission disputes are put away, at least for the moment. And even political advertising is good, though Donald Trump is spending less than expected, and rival Sinclair Broadcast Group just took a stock hit after warning that its campaign ads were soft.

“We’re doing great,” said Moonves of the political ads. “Mr. Trump doesn’t appear to be spending as much” as expected, he acknowledged. But “issues spending is tremendous,” said Moonves, who pointed in particular at five California CBS stations that are reaping a bonanza from a heavy crop of propositions on the state ballot.

Top-of-the-ticket advertising, he noted, is very strong in Philadelphia and Pittsburgh, as Pennsylvania shapes up as a key political battleground.

But the really big drivers for CBS, he made clear, are its expansion abroad, and into digital services such as CBS All Access and Showtime OTT. Moonves called it “very possible” that CBS would beat its target of landing 8 million subscribers for those services by 2020. And sports, he more than hinted, likely will become a factor in the digital growth. Asked whether CBS was looking to get its NFL offerings onto a digital service, he said “I think something will happen with it” well before the current CBS/NFL broadcast expires in seven years. Sunday football will hit the streaming services “sooner than later, that’s my guess,” he said.

Moonves, almost always an expansive talker, was particularly upbeat about his network’s embrace of Netflix. That Netflix picked up rights for the world, outside of North America, for the new Star Trek series and its predecessors suits him fine. That deal “more than paid for the entire cost of the show,” he said, and was better than CBS could have done with piecemeal sales around the world, according to its own numbers crunchers.

“We’re a big fan of Netflix. We don’t think they’re eating the world or trying to put us out of business,” Moonves said, declining to throw in with those who fear the streaming service is too big, too hungry or too ornery. “Frankly, they’ve driven up the price of premium content a great deal,” he said, pointing to what matters most to a content-provider like CBS. Rather than reducing the number of buyers around the world, SVOD services have sharply expanded the marketplace, he said, bringing seven, eight or nine buyers to national markets that might earlier have had two or three.

Currently, according to Moonves, the numbers crunchers say 65% of the viewers for the CBS All Access service are doing catch-up viewing of current series, while 20% or fewer are watching library shows, and the rest are picking up live station feeds. That soon will change, he said, as the service moves into the original programming business in coming weeks.

Moonves noted that past retransmission fights — one with Time Warner Cable, one with Dish — ended on the eve of a professional football games. “That’s the driver,” he said of live sports.

Yes, added Moonves, there will be some sort of share buyback with proceeds from a CBS Radio sale. But some of the money will be re-invested, he added.

Speaking again of Netflix, he said he envied the service on at least one point. “They have a big advantage over us,” he said.

“They don’t have to turn a profit.”

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