Moonves Expects Double-Digit Upfront Price Increases - Broadcasting & Cable

Moonves Expects Double-Digit Upfront Price Increases

Sees ad market improving in first quarter
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CBS CEO Les Moonves said he expects advertising prices to
rise by double digits during upfront sales for next season.

"I think we're in that kind of marketplace and we've got
that kind of ratings story," said Moonves, speaking at the Morgan Stanley
Technology, Media & Telecom Conference. He added that he was probably
making his network sales staff very unhappy by making such an aggressive prediction
months in advance of the May schedule announcements.

A year ago, in a strong marketplace, CBS held onto some
inventory to maximize pricing and got increases of about 13%. 

"We sold somewhere in the high 70s last year 77-78%. The
year before that, we were probably 10 points less because pricing was down, so
we bet more on scatter," Moonves said. "You know what? Once we establish our
pricing where we think is the fair marketplace, we would probably go to the low
80s, but not much more than that. So there's the possibility of a few point
more of sales, depending on the prices."

Moonves said that after some softness in the fourth quarter,
the ad market had firmed in the first quarter up with prices in the scatter
market up more than 15% above upfront levels. "Demand had increased greatly. It
is wonderful to see the auto companies coming back and they're coming back in
force," he said.

One negotiation CBS didn't get the best of came in the deal
its Showtime network did with The Weinstein Company, Moonves said.
"Unfortunately, it excluded black and white movies," he said. "We look pretty
stupid now, don't we? We don't get [Best Picture Oscar winner] The Artist. He sold that to Netflix. But
that's all right."

Moonves also had a small bone to pick with Netflix CEO Reed
Hastings, who also spoke at the conference. "The only thing Reed said that
really bugged me was when he said HBO has no competitor except for Netflix," he
said. "What about Showtime?"

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