CBS CEO: "Overnight Ratings Mean Nothing," Netflix Is Not the "Antichrist"
Leslie Moonves, at an investor conference, also addresses what Discovery's and Liberty Global's deals for small stakes in Lionsgate mean, his own deal appetite and strong current ad trends.
CBS Corp. president and CEO Leslie Moonves told an investor conference on Wednesday that "overnight ratings mean nothing" these days due to audience fragmentation and increased on-demand viewing and emphasized that "we don’t feel like Netflix is the Antichrist" even as other entertainment companies reconsider their digital licensing strategies.
Moonves spoke at the RBC Capital Markets 2015 Technology, Media and Telecommunications Conference in New York in a session that was webcast. "You can't look at the TV ratings like you looked at [them] even a few short years ago," he said when asked how his team evaluates what constitutes a TV hit these days. "You don't get real results for three weeks. We have over 10 shows that when you add in L7, an extra week of viewing, go up north of 3 million viewers. That's a substantial change."
He said owning and selling content down the line is becoming more important in that environment, and people seem to be sticking with shows longer to see if they can be better monetized over time.
Asked about Time Warner's recent commentary about reviewing its digital content licensing to possibly hold onto TV shows longer before making them available on the likes of Netflix and Amazon, Moonves said, "We are flexible, we take each show" and analyze the best strategy for it and "there are no hard and fast rules." He said his team was comfortable with that long-standing strategy.
He also touted his company's good relationship with Netflix, quipping that Time Warner has had more of a "long and interesting" history with the streaming giant. Moonves also joked that some in the industry used to think of Netflix and its CEO Reed Hastings as the Antichrist. "We don’t feel like Netflix is the Antichrist," the CBS boss told the conference. "They are a competitor, but they also give of lots of money for our content." He also said that Netflix was "a valuable partner," but emphasized that CBS would not give it all its content.
Moonves on Wednesday also once again touted the new Star Trek series in the works for the CBS All Access subscription streaming service that costs $5.99 per month. The CEO has previously predicted that "millions" would subscribe to CBS All Access to see the new show. "We're looking to do original content on All Access and build up that platform. Netflix is our friend a competitor. They compete with [CBS Corp.'s] Showtime. All Access will put out original content and knowing the loyalty of Star Trek fans, this will boost it. … There's about a billion channels out there and because of Star Trek, people will know what All Access is about."
On Wednesday, Moonves said he was happy with the traction All Access has seen so far and reiterated that more originals would come to the platform over time. "You know my passion, it’s original content," he said. "We’ll start with Star Trek."
"The dire predictions of cord-cutting were overblown," Moonves also said in his company's recent earnings conference call. And he reiterated those comments on Wednesday. He also reiterated that CBS was confident to be part of new services with limited channel offerings, saying: "Every skinny bundle needs CBS."
Asked about an often-discussed possible Apple TV service, Moonves said: "Apple has been exploring this idea for a while to put out a bundle of its own," which would likely be a skinny bundle of 15-20 channels or so for a cheaper price. Asked why it wasn't launched yet, he said he assumed that Apple hasn't put together a service that it felt was "satisfying" so far.
Moonves also continued to tout improving advertising trends. "Advertising is coming back in a big way for CBS," he had said on the company's recent earnings call. He added that scatter ad market was "the strongest we’ve seen in many, many years," adding that CBS has even been replacing promos with ads to accommodate strong demand. Moonves had also said on the earnings call: "The fourth quarter is going to be stronger." And in 2016, "advertising will be very strong," too.
On Wednesday, he predicted "substantially better" volume in the upfront 2016, saying it should be “a good upfront" based on current trends. He also said CBS feels it's in a good place with its ad loads. TW recently said it would look at reducing its ad loads on some networks to optimize ratings.
Moonves was also asked about the ad impact of New York’s seeming crackdown on fantasy sports league giants FanDuel and DraftKings, which are accused of operating as illegal gambling sites. The state has issued a cease-and-desist order on them. "This is not a monumental event for us," the CBS boss said. He said they are valued clients and "are not out of business yet," but said they are not as big as pharmaceutical and auto advertisers.
Moonves also addressed Wednesday's news that Discovery Communications and Liberty Global, in both of which John Malone owns stakes, had each acquired small stakes in Lionsgate. The CBS CEO called that an "interesting little move," saying: "That's a very interesting precursor to those companies coming together."
He said CBS hasn't felt compelled to acquire assets as nothing interesting had come up for the right price. "There haven’t been great opportunities," Moonves said. "I feel I have all the clout that I need."