CBS CEO Les Moonves called streaming skinny bundles of programming “a great idea whose time has come.”
Speaking at the Deutsche Bank 2016 Media, Internet & Telecom Conference in Palm Beach, Fla., on Tuesday, Moonves said that while most current attempts to sell cheaper bundles with fewer networks have not been successful, one that works is “inevitable.”
“You’ve heard the cliché over and over again, people are tired of paying for things they don’t want to watch. That’s finally going to change,” Moonves said. “Someone’s going to figure out how to do this and how to give people what they want to watch and it’s not for $100 a month, it will be for $35 or $39 dollars a month where you’ll really get the 12 to 15 or 18 channels that you care about. And not get the karate channel for 25 cents a month.”
Moonves said CBS’ own streaming services continue to do well, although he declined to provide any subscriber numbers.
He said the company was considering offering a combination of CBS All Access and the Showtime OTT service in a way that would provide a discount on the current prices of each service.
Marketing for the services will likely ramp up next year when the new Star Trek series launches on CBS All Access he said.
Moonves also said that talks about securing streaming rights for NFL football games on CBS All Access are continuing and that he predicted a deal was inevitable. He said the league would get a cut of CBS’ subscriber revenue and possibly bonuses as the streaming services' sub count rose.
During his talk, Moonves pointed out that several dayparts on CBS are rarely talked about but are very profitable.
Syndication, he said was a very profitable part of the company. Entertainment Tonight, for example will generate $100 million in profits this year.
He said daytime has had a turnaround in profitability from being in the red or break even to “wildly profitable.”
Moonves said the company took steps to cut costs and put fresher shows on the air.
“We were spending too much money on The Young and The Restless. Let’s cut $25 million from their budget and suddenly they become profitable,” he said. “You take a show like Guiding Light, which had been on only for 57 years between CBS Radio and TV, and put on an exciting new talk show called The Talk, which suddenly turns a $30 million loser into a $25 million profit,” he said. “You do things like that and suddenly have a daypart that becomes wildly profitable.”
Similarly in late night, Stephen Colbert and James Corden are cheaper and draw younger audiences than their predecessors, Moonves said.
“Letterman by the end of his run had become very expensive as we all know and his demographics started coming down a little bit,” he said. “So Stephen Colbert costs a lot less money and is a lot younger, so that changes around.”
In primetime, Moonves said CBS has ordered just 17 pilots, three to five less than last year. All but one of those is at least 50% owned by CBS, he added.
He expects to add only three to five new shows to the lineup next fall because he expects all five of the network’s new shows to get renewed, and four of those are owned by CBS.
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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