CBS Corp. COO Talks Aereo, Showtime, Netflix
CBS Corp. COO Joe Ianniello on Tuesday discussed Aereo, the growth upside of Showtime, and the outlook for retransmission and reverse compensation revenue at an investor conference.
Appearing at a Wells Fargo investor conference, he also said CBS Corp. would consider buying cable networks or TV stations if the price was right and the asset provided strategic opportunities.
Asked about Aereo, Ianniello initially quipped: "How do you spell Aereo?"
Aereo captures over-the-air TV signals and relays them to its subscribers' digital devices. Broadcasters have sued, arguing that the digital company infringes on their copyrights.
Asked about talk that the company could move the CBS broadcast network to a cable model amid the threat from Aereo, Ianniello said: "I don't think we are looking to do that," but CBS Corp. will have various backup plans if needed. "We like to preserve the current ecosystem."
"We don't think Aereo is legal," Ianniello added, emphasizing that the company continues to pursue the legal process. Mentioning Aereo's monthly price, he said CBS should get its fair share as the top-rated network. "We are not going to allow the consumption of our content without getting paid for it," he said.
"Consumers aren't demanding that that's the way they want to see content," he added. If consumers decided that Aereo-type services are what they want, CBS would provide that itself, he said: "We're not sitting on our hands."
Discussing the outlook for premium TV arm Showtime, Ianniello said it is currently in fewer than 20 percent of U.S. households. "Every time we can get 1 million more subscribers for Showtime, we make $100 million to our bottom line," he explained. "That's what we have to do."
He said that with Showtime's increased focus on original programming, its margins have risen because of new revenue opportunities in the digital age. Asked about a recent deal with Netflix for Showtime hit Dexter, the CBS Corp. COO said: "They paid a handsome price. They saw the value of it."
CBS previously said it targets about $1 billion in annual revenue from retransmission consent and reverse compensation from CBS affiliate stations by 2017, if not sooner, with half of that this year. Management had recently signaled it was running ahead of that target. "We are well ahead of that pace," Ianniello reiterated Tuesday.
How does he feel about the CBS Radio business? "We like it" and remain bullish on it, he said. But he again signaled that the company may continue to sell smaller, medium-sized market stations.