CBS Corp. is in a great position as a must-have network that viewers either won't drop from their skinny bundle selections, or will pick up as an SVOD option should they completely cut the cord, Chairman and CEO Les Moonves told attendees at an investor conference.
"You cannot live without CBS. It's not a channel that people can cut off. We're going to be in every home, on every device and therefore we're not subjected to" cord shavers dropping the network from their channel bundles, Moonves said in a presentation at the Morgan Stanley Technology, Media & Telecom Conference this week.
The statement sounded ominous, but Moonves delivered it somewhat tongue in cheek, explaining that viewers are attracted both to CBS' wide selection of content -- via both its main channel and owned networks such as CW -- and the availability of that content over the air, in all sizes of cable bundles, and in its $5.99 per month linear OTT subscription package, CBS All Access.
Being available in both the TV and OTT worlds gives CBS two solid revenue sources: retransmission licensing fees, and direct payments from viewers. "If you move over to the skinny bundle, which is happening more and more … what a surprise, you're not paying for … shows you don't want to watch … we're going to get paid more than if you took the full bundle. And then there's CBS All Access (which offers that) and at a higher price point."
CBS' own content, which includes top-rated hits like The Big Bang Theory and NCIS as well as eight of the top 10 syndicated shows on television, is a big draw for viewers. So too are sports, such as its share of NFL regular-season games, and live entertainment like the Grammys.
Moonves added that CBS Corp. is not necessarily looking to grow through acquisitions at this time, saying "there's nothing out there that is particularly attractive to us," although the company is keeping an eye out for things that can add to its content mix. "At the end of the day we're a content company. That's who we are first and foremost. If you see additional spending that's going to be involved with content."
Having both a linear online video service as well as a broadcast network has generated interesting new strategies for both CBS and advertisers, Moonves said. "We've heard over and over again how network television is dying and advertising is going down," he said. However, "the fourth quarter and first quarter markets are unbelievably strong" for CBS, with the Super Bowl and the Grammy Awards selling at very high prices to start 2016 off very well -- putting the company in a strong negotiating position as advertising upfronts approach in May and June.
Another potential money maker for CBS in 2016? Politics, particularly in its local television markets, as the contentious presidential election steamrolls ahead. "In local the number one word is political. Man, who would've expected the ride we're all having right now? … It may not be good for America but it's damn good for CBS," Moonves said. "…The money is rolling in and this is something. Fourteen million people on a Saturday night? It's amazing."
Despite early skepticism about how well CBS All Access would do in the still-fluid OTT market, the company appears to be proving out the use case for linear streaming, while simultaneously maintaining an even keep as a traditional network.
"We do it all, I think we do it well, and we're able to monetize that," Moonves said.
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