CBS chief won't give up on b'cast business model
EmptyJust about everyone is dumping on broadcast TV — except Les Moonves.
At the UBS media conference this week, NBC Universal's Jeff Zucker said the broadcast model simply doesn't work anymore. Disney's Tom Staggs called ABC "one of the more challenged businesses we have." Cable powerhouse Turner presented research that shows the broadcast season is off "to its worst start ever."
"I'm here to tell you the model ain't broken," the CBS Corp. CEO countered Wednesday at the UBS gathering in New York. "You can still make a lot of money in network television. We like 10 o'clock shows."
Moonves said that given NBC's ratings situation — fourth place — it probably was a good move to schedule the new Jay Leno show five nights a week at 10. CBS, on the other hand, wins that hour on four of those five nights.
"Certain people are having audience erosion and certain people aren't," said Moonves, who then offered a prediction: "I will bet anybody who would like to bet that 'CSI: Miami' on Monday night at 10 o'clock will beat Jay by a lot. Remember that — by a lot."
This year, only CBS has shown any kind of life in the ratings, with the lone genuine scripted hit ("The Mentalist") and only modest declines in adults 18-49, viewers and adults 25-54. ABC, NBC and Fox are down sharply.
According to Jack Wakshlag, chief research officer at Turner, it's the worst year the Big Four have had in households since 1995-96 and the worst ever in terms of declines in adults 18-49. Nielsen data shows that the four networks this season have lost 2.2 million viewers in the demo and 2.6 million households. Wakshlag said that was comparable to losing the entire Philadelphia region, the nation's No. 4 TV market.
At the same time, TV viewing overall has never been higher, and ad-supported cable has garnered record viewership this year. It has 59% of household primetime viewing, up 3% year-over-year, compared to the Big Four's 33%, down 6%. The declines are steeper among adults 18-49.
USA Network said Wednesday that it is poised to have the best-ever performance for a basic cable network in primetime in viewership, adults 18-49 and adults 25-54. It will beat the CW in 2008 among viewers and adults 25-54, the only cable network to do so.
Liberty Corp. CEO Greg Maffei on Wednesday said that broadcast TV may have to change to become more like cable networks with their dual revenue streams.
Maffei told THR after his session that broadcast networks can continue to focus on getting retransmission money and work with stations but may do better in the long run as cable networks. He pointed to how ESPN's deep and costly plunge into sports rights works better for Disney on cable than it does for ABC.
Moonves acknowledged that changes would come, slowly, in broadcast TV but would "not happen for a long, long, long time." He said that a few cable operators had suggested that CBS would be better served by going directly to cable systems instead of having affiliates so CBS would get paid directly for its network.
"It could very well happen five to 10 years down the line," he said.
CBS' first affiliate deals come up for renewal in about seven years. But he also spoke to the strength and importance of CBS' affiliate relations and how he didn't want to bypass the importance of local broadcasters to their audience.
Affiliates likely would have to buy more programming or develop more themselves if they lost the network connection, observers said.
UBS analyst Michael Morris said that more diversified companies, which are less reliant on broadcast results, are more likely to be early innovators in this field. "I think that is why you saw a more aggressive posture from Jeff Zucker," who noted that only 15% of NBC Universal's operating profit comes from NBC, he said.
Vogel Capital Management president Hal Vogel agreed with Moonves and his expectation for a slow move toward change. Overall, though, the network and affiliate model is "remarkably robust," he said.
A better economy down the line could help highlight that. "The network model will all of a sudden look better than it does now," Vogel said.