|
 It is a bold but not sudden move for the traditional television
executive running a network known for its older viewers, who
approached the digital TV revolution gingerly but is now pushing his
company to its forefront.
The network's push to ramp up its online All Access service - which
offers its shows on PCs, tablets and smartphones for $5.99 a month -
comes as media companies are rethinking their business models and
their relationships with streaming video providers, treating them
more like competitors than allies.
Advertising is still important for CBS - home of the Super Bowl this
year - but the focus is shifting to new revenue streams.
"When I started this job 20 years ago, advertising was everything to
this company," Moonves told Reuters in an interview in his Los
Angeles office on Monday, as he prepared to travel to the San
Francisco Bay Area for the big game. "Advertising will still remain
important, but it's not nearly as important as some of these new
ways of getting revenue, such as interactive."
Moonves is also considering putting shows on All Access from the CW
Network, its joint venture with Time Warner Inc's <TWX.N> Warner
Bros, which produced the offbeat hits "Crazy Ex-Girlfriend" and
"Jane the Virgin." Ultimately, Moonves said he wants the service to
include content from its Showtime subsidiary, best known for
"Homeland" and "Dexter," and possibly shows from other partners.
He would not say which CBS shows - which include hits such as "The
Big Bang Theory" and "The Good Wife" - would be candidates for
exclusive distribution on the All Access service, but suggested it
would be original content and shows that have an avid fan base but
not necessarily high ratings.
CBS already said last year that its new "Star Trek" series,
scheduled for 2017, would premiere on the network then switch
exclusively to All Access.
Moonves said CBS could have sold "Star Trek" to Netflix, Amazon.com
Inc <AMZN.O> or Hulu for "a pretty nice profit," but instead is
betting that it will attract more mobile-savvy viewers willing to
pay for subscriptions, which he hopes will be more valuable in the
long term.
"Star Trek" is for All Access what "House of Cards" was to Netflix,
he said.
Moonves now has complete control at CBS to push his digital agenda.
Two days after Moonves spoke to Reuters, longtime CBS chairman and
majority owner Sumner Redstone stepped aside and Moonves was handed
the chairman role, with the blessing of Redstone's daughter Shari.
The day after that Redstone also stepped aside at his other
majority-owned media company Viacom <VIAB.O>, and his role went to
CEO Philippe Dauman, over the objections of Shari.
OLD-SCHOOL
Moonves, who splits his time between Beverly Hills and New York and
describes himself as an “old school media guy,” has spent most of
his career in television, developing hits such as “Friends” and
“Everybody loves Raymond.”
When Redstone split CBS from Viacom 10 years ago, investors saw the
mainstream broadcaster as the slow-moving company catering to an
older audience, compared to the young, scrappy Viacom, whose
networks include Nickelodeon and MTV. But CBS shares have easily
outperformed those of Viacom over the last five years.
[to top of second column] |
Mario Gabelli, the second-largest shareholder of Viacom and CBS,
wants to see Viacom take a page out of Moonves' digital strategy
playbook. "It's going to be tough to get into the digital world and
over-the-top," he told Reuters.
Digital success has helped Moonves gain favor with Shari Redstone,
who is vice-chair of the boards of CBS and Viacom, and nominated
Moonves for the CBS executive chairman role.
"Les and I get together frequently and he is always asking me what
companies I am investing in and what I am seeing,” said Shari
Redstone, whose firm, Advancit Capital, invests in early-stage
companies in technology and media. "He is fascinated with
everything."
The 66-year-old Moonves may not be a millennial but he is more
familiar than most of his generation with the latest technology.
Delivery service Postmates and route-finder Waze are two of his
favorite apps. Every few months he visits Silicon Valley to see what
is new, and said he would be open to a seat on the board of a media
technology company one day.
It is unclear how exactly the CBS All Access service, which launched
18 months ago, is doing. The network will not disclose how many
subscribers the service has, but Jefferies analyst John Janedis
estimates it is around 500,000. That is a fraction of Netflix's tens
of millions of viewers.
Moonves believes his relative success in the digital realm may be
down to the skepticism he brings from a pre-smartphone era, and not
just saying yes to new ideas.
"I am the old-fashioned guy," he said. "My job at the company is to
be Dr. No."
Looking back, he is glad CBS said no to buying a stake in online
streaming service Hulu, saying his team convinced him it did not
make sense and that CBS would be better off controlling its own
content.
"It was bold in the sense that they were not afraid of being
perceived as a Luddite of a company," said Pivotal Research analyst
Brian Wieser. "It was the right decision because it did not limit
their strategic choices in what could be a fast-changing business."
Moonves admits he was worried about losing ratings, upsetting the
network's affiliates and cannibalizing its business with the launch
of All Access, but is now fully behind it.
"We are investing in the future of All Access, which we think is an
important part of our future," he said.
(Reporting by Jessica Toonkel; Additional reporting by Lisa
Richwine; Editing by Bill Rigby)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
