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CBS Corp. CEO Talks Time Warner Cable Dispute, Netflix Competition

UP: Leslie Moonves

Leslie Moonves also says TV is a better business than film and discusses "pre-historic" thinking about retrans fees, why only ESPN should get paid more than CBS and how his wife binges on "Game of Thrones."

CBS Corp. CEO Leslie Moonves at an investor conference on Wednesday discussed the recent Time Warner Cable carriage dispute, competition with Netflix, Aereo and why only ESPN should get paid higher carriage fees from pay TV firms than CBS.

Appearing at the RBC Capital Markets 2013 Technology, Internet, Media and Telecommunications Conference in New York, he said: "We should probably be number two behind ESPN" in terms of carriage fees as the top network. "I get why they are in a different ballgame than anyone else," he said about ESPN.

Discussing the Time Warner Cable dispute, which saw CBS going temporarily dark for the first time, Moonves said: "I think this was the watershed moment in where we are going with our [carriage] rates."

"It was a difficult time. It is never comfortable when you're off the air," Moonves said, mentioning it involved being on the telephone for 2-3 hours every day. "But it ended up in a place we are very pleased with."

Why did CBS not offer TW Cable digital authentication rights in the final deal? "We support digital authentication. We need to get paid for it," he said. "Authentication is a good thing. We want people to get our content any time they want. But it involves getting paid for it."

Moonves suggested CBS and TW Cable could revisit a deal for digital rights via authentication within the next year or two. But he emphasized: "We need to get bit more for that."

Asked if viewers still notice a difference between broadcast and cable networks in the digital age, Moonves said: "There is really no big difference" in people's minds between, say, CBS and TBS – "except, of course, our ratings are higher." Younger people don't really know the difference between broadcast or cable channels, and about 87 percent of people who watch CBS, watch it on pay TV, he added.
 
Moonves argued that was another reason why pay TV firms shouldn't argue that broadcasters used not to get paid retrans fees. He suggested that some of them were "probably pre-historic in terms of their thinking."

Asked about digital media service Aereo and whether CBS could become a cable network if Aereo's offers end up being ruled legal, Moonves said: "More people talk about Aereo than subscribe to it. It is illegal to take our signal." He added that the firm could put CBS on cable, but that was "not something we want to do" or the company was likely to get to, even though it would be easy to do.

Discussing Netflix, Mooves called it a "friend," "partner" and competitor – just like any other company in Hollywood. "Netflix is a competitor to Showtime. House of Cards is a wonderful show," he explained. But "it is similar" to other Hollywood deals and relationships CBS had. Moonves cited that 20th Century Fox, for example, produces How I Met Your Mother for CBS, while its Fox network "tries to beat the heck out of us."

Showtime was the topic of debate Wednesday as well. Moonves lauded "a great closing of the gap, primarily because of our original programming" in comparison to HBO in terms of both subscribers and carriage fees.

Moonves also once again said that Showtime could start being offered as a broadband-only service one day – "somewhere down the line."

Discussing what has been called a golden age for TV drama, Moonves on Wednesday also told that conference that TV work currently seems to be "far better" than many films.

Asked about the difference in film and TV business models, he said: "Every film is a crap shoot," and the business is "a lot less predictable," which is why studios have focused on tentpole franchises.

Moonves emphasized that CBS Films has continued to focus on smaller releases, lauding Last Vegas for costing $28 million, but having grossed more than $36 million. "We finally have something that we are proud of," he said.

While the batting averages in both businesses are "not great," Moonves concluded: "I like the television business a lot better. It is a lot more predictable."

Could CBS acquire a cable channel or two? Moonves said "absolutely," adding that he also wished CBS had entered the news channel business a long time ago. "CNN should have been a CBS cable network," he said.

Elaborating on possible cable network deals, Moonves said, "we know how to run and program" channels, but "prices seem to be very high," and the world may shift from cable to online. That is why his company has announced an online news channel that will by-pass cable, he highlighted.

Moonves also reiterated the sentiment that content remains king in the digital age, joking about telling his wife, Julie Chen, she could watch another episode of an HBO hit show after a binge-viewing session. "It's 3 o'clock in the morning, and my wife wants to put on another episode of Game of Thrones. I said that's it, I'm done. I'm going to sleep – you can keep watching after watching seven hours in a row or something like that."

Concluded Moonves: if content companies produce good content, "people will find time to watch it.

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai