Moonves Says CBS Would Also Succeed in Cable

Showtime profits hit $750M

By Jon Lafayette -- Broadcasting & Cable, 9/12/2012 1:11:06 PM

Already king of the broadcast world, CBS CEO Les Moonves thinks he could conquer cable as well.

During a session at the Bank of America Merrill Lynch Media, Communications & Entertainment Conference in Beverly Hills, Calif., Wednesday morning, Moonves was asked what businesses he'd like to add at CBS.

While saying CBS has "no burning desire" to acquire anything, he added that "looking down the road, you always say, could we manage some of the cable assets that are out there better than some of the other people? There's no question about that."

In the case of a general entertainment cable channel, "I think we could program it pretty darn well. We've got a great library. We obviously are programming people. We know how to do this. We've been the No. 1 network nine of the last 10 years. We know this business. We know how to make networks work," he said.

Speaking of cable networks, Moonves pointed to the success of Showtime. At a time when some industry observers have expected no grow in pay cable, he said, Showtime's subscribers have risen to 22 million from 13 million in the last five or six years.

In addition, as CBS has signed new carriage deals with distributors, "Showtime is going to be paid more money," Moonves said. "Showtime...is much hotter than it ever was because of their programming and people are paying more for Showtime. People want Showtime. So as other pay services may be going down, either creatively or in terms of their sub, Showtime is a great success story in the pay window. And once again, over the past five years, Showtime has gone from making approximately $200 million to making over $750 million this year," he said.

Moonves also said that advertising on the upcoming Super Bowl on CBS is more than 90% sold and that commercials are now being sold for more than $4 million.

Moonves said it was hard to give a read on the rest of the ad market until the new season starts. "As soon as we succeed, which we think we will, and we think we'll do better than our competitors, we feel like the scatter market will come our way."

The  Super Bowl will be part of an unusual stretch in the first quarter, in which CBS will also broadcast in primetime the NFL's AFC Championship game and the Grammy Awards. Moonves called that "the Haley's Comet of network television." He said that three of those four Sundays, our ratings are going to be extraordinary. So for those of you who don't think we're going to kick-start '13, well, you're not paying attention."

Moonves also took a shot at technologies that could adversely affect revenues. He said Dish Network's ad-skipping Hopper DVR can't exist. "If they want to eliminate our commercials, we will not be in business with them," He said. "If they want to continue down that line, then we will just not be on Dish. We will go elsewhere."

And regarding Aereo, which retransmits broadcast programming over the Internet without paying the retransmission fees cable and other distributors pay, Moonves declared "there's no way we put out what we're doing, there's no way we're spending the money we're spending on sports, on programming, that we are not going to get paid appropriately in either sub fees or in advertising fees. That is how we make our money. That is why we can provide the product we do. If you want to get crummy user-generated product, go on YouTube. CBS is not YouTube."