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Moonves: CBS Upping Netflix Content

4 Dec, 2012 By: Erik Gruenwedel

Saying the distribution world has “changed drastically” is past few years, CBS Corp. CEO Les Moonves said he expects the media company to expand content license distribution agreements with Netflix and other subscription video-on-demand services.

Speaking Dec. 4 at the UBS Global Media and Communications Conference in New York, Moonves said there are new incremental revenue streams “popping up” everyday to monetize content, from SVOD, iTunes, electronic sellthrough and CBS.com.

“A TV program of ours will get paid in 12 different ways when five years ago it was one or two ways,” Moonves said.

The CEO said Netflix has changed the playing field to become a compelling and necessary distribution channel while remaining loyal to longstanding revenue opportunities in ad-supported broadcasts, syndication and retransmissions.

“Nothing can jeopardize those three revenue streams,” Moonves said.

He said SVOD has become an ideal way to sell select shows to prospective audiences, including directing them to the linear broadcast. Moonves said that happens with cable original programming (i.e. Showtime’s “Dexter”) and primetime shows.

“The more information we have, the more we can say, ‘If we put on the past 11 years of 'CSI' when there’s cash available, [that] might not be such a bad idea,’” Moonves said, reiterating that with ongoing advances in the dissemination of content, CBS would not be the first to embrace new distribution without first dipping its toes in the water.

The CEO said Netflix has bought a considerable amount of catalog TV programming, some of which has done well and some, which hasn’t. He said that while pricing on the licensing has remained steady, CBS is replacing underperforming content with fresher material. Netflix pays CBS a flat — not transactional fee — for content. Streaming deals (which run for two years) already exist for current CBS fare, which automatically move to Netflix when removed from broadcast.

When “CSI: Miami” was pulled off the air in June, it automatically moved to Netflix at a pre-set price. Notably, CBS will begin offering SVOD previous seasons of current TV shows — a strategy it has heretofore avoided. USA Network is paying CBS $2.5 million an episode for the domestic syndication and digital rights to “NCIS: Los Angeles.”

“For that [price] they got SVOD exclusivity as well,” Moonves said. “For $2.5 million an episode, they absolutely deserve that.”

CBS is also considering licensing content for the first time to Apple.

“We looking at that [license fee] number to go up,” Moonves said, cautioning “it’s not necessary” to “throw all your stuff in SVOD,” which may affect some other pieces of your business. Now we're considering putting more content [in SVOD], which will only increase our revenues there.”


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