Leslie Moonves Says CBS Is Prepared for Cord-Cutting Future

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CBS CEO Leslie Moonves

The exec also said that the network is creating a new version of 'The Twilight Zone.'

Revenue and profit for CBS both grew slightly in the third quarter compared with the same period a year ago, the company said Thursday, but Wall Street's initial reaction was that the numbers were not impressive, and in after-hours trading the stock was down about 2 percent. 

The company earned an adjusted $1.11 per share on $3.2 billion in revenue. Analysts expected about $1.08 in earnings per share on revenue of $3.3 billion.

CEO Leslie Moonves said CBS "saw dramatic growth" in affiliate and subscription fees and that when digital services and skinny bundles are included, "We have more subscribers at CBS and at Showtime than we did a year ago."

Analysts weren't expecting much growth from CBS, and ditto for its competitors in the TV industry, given that around 22 million Americans will have cut the cords on their cable TV services by the end of this year, according to eMarketer.

But Moonves said cord-cutters don't bother him. "We're ready for them," he said Thursday. "We welcome that."

Moonves said that CBS gets about triple the revenue from its CBS All Access digital service per user than it gets from traditional distributors of CBS over-the-air, and it makes twice the per-sub revenue on skinny bundles than it does on regular bundling.

Cord-cutting, the exec said, amounts to "real, measurable upside for us ... cord-cutting is an opportunity."

Beyond cord-cutting, TV ratings and ad sales are challenged given competition from digital services, according to analysts.

Doug Creutz of Cowen & Co. said in a recent research note that big media firms were the "walking wounded," while Todd Juenger of Bernstein said the best investors could hope for this earnings season is "less bad than expected." Juenger said of the TV business, "The fundamentals are getting worse, and the stocks are expensive relative to that."

But Moonves was all upbeat on Thursday. CBS, he said, is tops in late-night for the first time in 20 years, and this most-recent third quarter marks the 31st quarter in a row where earnings-per-share has grown. Star Trek: Discovery is "a game changer" for CBS All Access, the exec said, given it is a hit practically worldwide.

Moonves also said CBS All Access will be home to a new Twilight Zone series.

Moonves acknowledged that NFL ratings have been up and down, but called pro football "still the best game in town." He added that former Dallas Cowboys quarterback Tony Romo is "a true sensation" in the broadcast booth.

"I don't know of one sponsor that's pulled out of any spot they've had," Moonves said of the political controversy that has enveloped the NFL. "I don't think its affecting advertising or their desire one iota."

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