Moonves: CBS Negotiating ‘Quickly’ on Latin America Netflix Streaming Deal3 May, 2011 By: Erik Gruenwedel
The agreement signals Netflix’s foreign expansion beyond Canada could occur sooner than expected.
CBS Corp. is urgently negotiating streaming deals with Netflix for the online disc rental pioneer’s pending foray into Latin America, in addition to its Canadian service, according to CEO Les Moonves.
During a May 3 fiscal call, Moonves reiterated that the February Netflix streaming deal for catalog TV programming did not cut into the network’s secondary and third-tier syndication TV deals for the same content.
He said the content (7% of it’s the CBS library) had already been sold elsewhere and that the Netflix agreement was not exclusive and would still generate substantial incremental revenue, beginning in the second quarter.
“So not only can we sell this programming again domestically, we will look to sell this content online internationally as well,” Moonves said. “And with competition with Netflix growing all the time, there is a great possibility several new prudent deals are on the horizon.”
The CEO characterized as “very serious” content licensing negotiations for Netflix’s Latin American service, which he said could happen very quickly. He added that Amazon was also “very interested” in content, with similar discussions underway with other streaming players.
“Look, I don’t believe that Blockbuster was bought by Dish [Network] to be a bunch of stores selling [discs],” Moonves said. “I think there are other content places that want our content … so the more the merrier. The world for premium content providers gets bigger and bigger across the board.”
The move to repurpose original programming through burgeoning digital platforms marks a switch for CBS, which has heretofore held back distributing content to online platforms such as Hulu and Netflix.
“How much we sell depends on how much they want to pay,” Moonves said.
CBS reported first-quarter (ended March 31) operating income before depreciation and amortization of $230 million in its entertainment division, up 121% from OIBDA of $104 million during the previous-year period. Cable networks (which include Showtime, The Movie Channel and Flix) reported OIBDA of $153 million, up 51% from $101 million during the same period last year.
Overall, CBS reported net income of $202 million, compared with a loss of $26 million during the same period last year. Revenue was flat at more than $3.5 billion.
“We had a great quarter,” Moonves said.