CBS' future: Netflix, not CNN
CBS will soon be producing original shows for digital video channels like Netflix, Hulu and Amazon, C.E.O. Les Moonves told investors Thursday.
“Going forward [CBS Television Studios] will be producing more and more shows for more and more outlets, including major streaming companies and other emerging distributors," Moonves said. "I think shortly you will hear about us being in business with some of the S.V.O.D.s with programs."
CBS is going all-in in being a content company, and that means that it can no longer afford to just sell to itself, and associated networks like Showtime and The CW. While Moonves said that CBS-owned channels will get priority, he noted that ABC will air a CBS-produced series for the first time this season (drama "The Club").
Digital outlets like Netflix and Amazon have become enormous revenue streams for CBS, with Netflix just renewing its CBS library deal, and CBS selling individual series to both Netflix and Amazon. As Netflix, Amazon and Hulu look to add original programming, CBS is poised to provide them with exclusive series those companies can offer either in the U.S. or around the world, just as Media Rights Capital does with its series "House of Cards," of which Netflix is the largest licensee.
One thing that won't be in CBS' near future: major acquisitions, like that of CNN.
"We obviously look at every opportunity that arises in our industry, but here at CBS, we will continue to be very disciplined in our approach and we don't see anything that would change capital our return plan," said CBS C.F.O. Joe Ianiello, on the earnings call.
With regard to CNN, Moonves said that if Fox acquired Time Warner and sold CNN, it would have been a good fit, but added:
"We thought about it, we talked about it, it is obviously something that is not going to happen," Moonves said, adding that the value of the channel being mentioned in the press (as much as $10 billion), was not what CBS would have paid. "The numbers they were throwing around were silly."
With regard to the CBS broadcast network, Moonves said that a "frenzy of political spending" from candidates and PACs would be a boon for its bottom line later this year. He also made a pitch for making C7 (measuring everyone who watches a show within seven days of airing) the standard for all TV shows.
"We as programmers have to look at the world in a totally different way, no one should even be looking at overnights any more,” Moonves said. "The C7 deal will shortly become the only measurement of only relevance, overnight ratings and other daily ratings are totally antiquated."
C7 remains controversial in the ad space, but CBS has been the loudest advocate for it, and has struck deals to count it with media buyers for this coming season.