CBS CEO Les Moonves said that while cord cutting may be bad news for others in the TV business, it’s a positive for CBS.
CBS has been expanding its over the top business, with subscription products CBS All Access and Showtime running ahead of projections, and the CBSN news service attracting relatively young audiences.
At the Goldman Sachs Communacopia investors conference Thursday, Moonves said CBS is also planning an over-the-top service based on the syndicated magazine show Entertainment Tonight and provided more details about an upcoming streaming sports news service.
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The state of the pay TV business has worried investors about the future of distribution and advertising revenues. But CBS is an exception to the rule, Moonves said.
“Some say the big bundle will be around for a while. Probably right. Over the top is going to get bigger and bigger. Definitely right. Direct to consumer offerings are going to get larger and become a more important part of the world as well as skinny bundles are going to be a bigger player,” he said.
The churn is good for CBS because it is distributing its contents in all ways available.
“When ESPN announces that they’re losing subs, or Comcast announced they’re losing subs, that’s a good thing for CBS. These cord cutters, they’re not disappearing. They’re not going no where. They’re not cutting their cord and going into the woods and avoiding television. They’re not doing that. They’re just going to other services,” Moonves said. “And the good news for us is if you are on a traditional MVPD, that’s great. We get paid something like $2 plus a sub. If you go to a skinny bundle, we get something like $4 a sub and if you go to CBS All Access we will get $6 a sub.”
“So all this movement that’s out there, when [Disney CEO] Bob Iger says oh we’re going to be flat or Comcast says our subs are declining. For CBS this is viewed as positive news. So when we get lumped in with that, we say there’s a misconception here. We are different than them. That this movement is a positive for us,” Moonves said.
Moonves also tweaked Disney and ESPN in talking about CBS’s upcoming sports news streaming service.
“We have a huge sports business through cbs sports, the sports channel, CBS Interactive our sports operation there,” he said. “We have a ton of content, we have a ton of on-air announcers. The investment for us is not a lot of money. We know how to do it. We did it with news. “
Moonves noted that CBS developed the streaming network technology in house, rather than buying a company like BAMTech, as Disney did for more than $1 billion.
“In addition we think there’s a place in the marketplace for sort of straight factual clips, highlights, scores,” Moonves added.
I’m a big sports fan. I’m turning on ESPN a lot and I’m seeing people yelling at each other. I want to see whether the Dodgers or the Yankees won last night. And often it takes 20 minutes to get that. On our sports network, you won’t have to wait 20 minutes,” he said.
Moonves said CBS has some of the rights it needs from the leagues it works with to do the streaming channel, so he will have to negotiate for. “We anticipate that won’t be difficult to do.
Moonves provided few details on the ET service, but called the long running show “the most viable newsmagazine. . .We’re going to make that an over-the-top service as well, so that continues to expand.”
