Cord cutting might be bad for most cable networks, but it's not hurting CBS. In fact, CBS CEO Les Moonves said CBS makes more money as viewers leave traditional distributors and stream the network.
Speaking during CBS’s third-quarter earnings call, Moonves said that while other networks are losing subscribers, CBS is growing. Both the CBS broadcast network and premium cable network Showtime have more subs than a year ago he said.
“Best of all, as consumers cut the cord and switch to skinny bundles, the economics get better for us, growing rates as well,” Moonves said.
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When a viewer switches from a traditional distributor to a streaming skinny bundle, CBS’s fee doubles, he said. If they subscribe to CBS All Access, CBS’s haul sometimes triples.
Similarly, when a Showtime subscriber moves to streaming, the revenue is “substantially” higher than what CBS gets from traditional MVPD distributors.
“OTT is a more profitable business model,” Moonves said.
On top of that, advertising on streaming platforms sells at higher rates, he added.
Moonves said that CBS is ready for changes affecting the TV business, which will create haves and have nots. “Clearly we’re on the right side of that divide,” he said.
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