Les Moonves tells investors CBS didn’t suffer a bit from Time Warner Cable blackout
CBS chief executive Les Moonves' message to Wall Street: The dispute with Time Warner Cable that blacked out the company's channels on Time Warner subscribers' cable boxes was no skin off their nose.
“I know you have all been focused on the Time Warner Cable dispute, but the fact is that the blackout did not negatively affect our company’s third quarter results, and obviously led to dramatically improved retransmission fees,” Moonves told analysts Wednesday in an earnings call. “You will see future increases in years to come.”
While Time Warner Cable reported that it had lost hundreds of thousands of subscribers in the quarter, and blamed the CBS dispute as one of the prime culprits, CBS said that advertising for the network during the quarter was up 13 percent.
To further emphasize the point, C.O.O. Joe Ianniello noted that WCBS, the network’s flagship New York station, saw double-digit revenue growth in the quarter, despite being dark for Time Warner Cable customers through almost all of August.
The growth caused CBS chairman Sumner Redstone to call Moonves a “miracle worker” on the top of the earnings call.
Moonves said that going forward, around half of CBS’ revenue will come from sources other than advertising, driven largely by retransmission fees, as well as syndication and digital rights. CBS owns much of the content it televises.
To that end, the company says it will start selling Showtime’s “Dexter” to basic cable channels, and is hoping to sell programs like “Hawaii Five-0” and “Blue Bloods” into syndication soon. A potential spinoff of “NCIS: LA” based in New Orleans could also boost the company’s bottom line.
The plan also includes selling digital rights to cable companies and other distributors, and to start selling shows on a “C7” basis, meaning that views that take place up to seven days after a show airs will count towards an ad impression.
“Everything can’t be included in the one rate we negotiate with the MVPDs,” Ianniello said. “It is our content, we spend a lot of money for our intellectual property, and we want to monetize that.”
Widely expected consolidation among cable companies (Charter is considering an acquisition of Time Warner Cable) is not something that worries the CBS executives.
“We don’t lose any sleep on the consolidation,” Ianniello said. “Consumers will always have a choice, and you saw that with the Time Warner Cable dispute, where their subs were down while Verizon, AT&T and DirecTV were up.”