CBS Corp. CEO: Buying A Cable TV Channel Wouldn't Make Sense
NEW YORK - CBS Corp. president and CEO Leslie Moonves on Wednesday said the economics of buying a cable network like the TV Guide Channel or Hallmark Channel wouldn't make sense and predicted more subscription VOD services would launch this year.
Appearing at an investor conference in a session that was webcast, Moonves also predicted that his company would this year book political advertising revenue close to the $180 million it got for the last mid-term elections. In the year of the last presidential election, CBS Corp. made $150 million in political ad revenue. "We think it will be closer to the $180 million," Moonves said.
Following a recent report that CBS was among those looking at the TV Guide Channel, Moonves told the Deutsche Bank Media & Telecom Conference in Palm Beach, Fla. that "the economics of buying a cable network, we have explored that, don't really make sense," and investors wouldn't like the company "spending x amount for the Hallmark Channel, the TV Guide Channel." Asked if CBS couldn't use a cable outlet to distribute more of its successful content, he added: "They don't make sense per se at the prices being talked about now, and the economics of doing our kind of programming there wouldn't necessarily make sense - yet." He mentioned a $3 million episode of CSI as an example of high-quality content that wouldn't work financially on cable.
With Comcast's recent launch of the Streampix streaming video service, Moonves said: "Where Comcast goes, Time Warner [Cable] will probably [go]." Plus, Apple has had conversations with CBS over the course of time, meaning there are likely more digital players ahead that will pay CBS for its content.
Could CBS bring out an over-the-top version of Showtime? Moonves said his company has decided against it for now as "we like being bundled" at the premium TV arm. At CBS though, he said he wouldn't mind unbundling, "because we know we will be one of 15 channels" offered in such an environment.
Discussing the CBS network's performance, Moonves once again touted its schedule's strength. "It's the weaknesses I worry about," he acknowledged. "And out of a 22 hour schedule, we maybe have an hour and a half of weakness. That's a pretty good position to be in." Questioned which one hour he was referring to, the CBS boss replied: "A lot of people in Hollywood would pay a lot of money to know that answer."
Asked about the effect that Oprah Winfrey’s departure from the first-run TV syndication market has had, Moonves said it “changed the market quite a bit” as CBS lost the distribution money from her show. But Judge Judy became the number 1 show in first-run syndication, followed by Dr. Phil, and CBS has eight of the top 10 shows in this space, he emphasized. “Net-net it ended up not being such a bad ting for us,” Moonves said, emphasizing though that he was not denigrating Oprah. “She's a legend,” he said.
Moonves also once again said that the goal of the young CBS Films business is to be "small, but profitable."