Moonves talks digital ad market at PwC event
Ad market is back, but not where it was, says CBS presidentNEW YORK -- The advertising market is back, as was evident in the recent upfront ad sales process, but it's still not where it was several years ago, CBS Corp. president and CEO Leslie Moonves said here Tuesday.
Speaking at the launch event for advisory firm PricewaterhouseCoopers' annual Global Entertainment and Media Outlook Report, which gives five-year projections for the media and entertainment industry, Moonves also said media companies still only get paid digital pennies for every analog dollar -- a phrase that NBC Universal CEO Jeff Zucker made famous.
Moonves' biggest fear is that 50% of "CSI" will watch the hit show online without the firm getting fully paid for it, the CEO said.
Discussing the ad market, Moonves said: "I hesitate to say we're all the way back," highlighting that industry ad revenue was higher three to four years ago.
In the upfront, broadcast networks saw ad prices rise high-single digits "pretty much across the board," Moonves confirmed.
And he highlighted how much auto ads have rebounded, pointing out an 80% in this category in L.A.
Moonves also made his latest plea for broadcast TV. While he likes "Mad Men," it draws less than many of CBS' weakest primetime shows, he said. "It's still about the big tent."
He was also asked what CBS Corp. would do with all its cash.
"Nobody wants us to buy anything," Moonves said. "We are not looking for any major acquisitions." He signaled more details on possible stock buybacks or dividend increases could emerge later this year.
Discussing the recession, Moonves said it offered an opportunity to streamline operations. "The media companies...we got fat in a lot of areas," he told the PwC crowd. "We realized there was a lot of cost cutting that could be done."
As a result, CBS Corp. can be "much more efficient" in the current rebound. "Life looks a lot brighter."
Here is a look at other tidbits from the PwC event Tuesday:
-- Stefanie Kane, a partner in PwC's media and entertainment practice, said that rather than stalling progress, the recession accelerated the digital migration of media.
By 2014, however, traditional media will still make up the overwhelming share of media revenue. Kane's conclusion: "We should embrace digital not as a competitor to traditional, but as a complement."
-- "We don't see the Internet cannibalizing TV," Kane said, instead describing it as a "symbiotic relationship." As examples, she pointed to the millions of tweets and text messages that "Lost" fans sent after the series' finale.
Kane predicted a similar effect of tablet computers on media. Early adopters believe they will read more books and consume more media on the hot new devices, she said, citing research.
-- PwC media and entertainment partner Sean DeWinter highlighted the business and consumer loyalty benefits that technology has brought to the film business. He mentioned 3D, and in particular the success of "Avatar," as well as Netflix's streaming service as examples.
-- DeWinter also highlighted the continued importance of international markets as industry growth drivers.
"For every dollar, 67 cents of that will be spent outside of the U.S.," he said.
The BRIC countries (Brazil, Russia, India and China) in particular will continue to outperform.
However, the U.S. media and entertainment industry still represents 30% of the global industry and is nearly three times as big as second-placed Japan, DeWinter emphasized. The PwC report showed the U.S. industry at $428 billion in 2009, followed by Japan with $164 billion, $88.5 billion in Germany, nearly $76 billion in China and $73 billion in the U.K. This marked the first time that China overtook the U.K.
-- 2009 industry revenue trends in the U.S. were largely in line with the global trends. However, the newspaper and music businesses in the U.S. are declining more quickly than elsewhere as the digital migration moves faster in the U.S.
In two areas -- the radio and book segments -- the U.S. posted bigger growth figures in 2009 than the world overall.