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Les Moonves Questions DirecTV Now Sub Price, Says Online TV Can't Exist Without CBS

5 Dec, 2016 By: Erik Gruenwedel

CBS Corp. CEO Les Moonves

CBS boss Les Moonves remains a consummate corporate cheerleader — never at a loss for words trumpeting the company brand, including Showtime.

Speaking Dec. 5 at the UBS 44th Annual Global Media & Communications confab in New York, Moonves reminded attendees the media giant is well known for tough negotiations involving pay-TV operators and third-party over-the-top video services. Indeed, CBS catalog programming didn’t join Hulu until 2013.

“We’re not unfair. We just want to get paid for what we have,” he said.

Indeed, with CBS reportedly inking a deal with Google’s planned online TV service bowing in 2017, it remains at an impasse with DirecTV Now, AT&T’s standalone upstart online TV service. Moonves said negotiations involving the CBS network and Showtime pay-TV channel put the company in a “different boat” than other content holders, resulting in “more-demanding” negotiations involving digital and stacking rights, among other issues.

“It’s not just economic factors. I’m assuming that we will be able to make a deal with them.”

Moonves said he understands aspects of DirecTV Now, adding it depends on service’s real price points and what distinguishes it from the competition. Calling the $35 entry price point very attractive, he said DirecTV Now would lose money maintaining that price.

“There’s no way they last for a whole long period of time at $35 for 80 channels.”

He said DirecTV Now would not get access to Showtime for the same $5-per-subscriber HBO is getting.

“But then they’re going to own HBO, so it’s different.”

When asked whether he would prefer licensing content to a third-party OTT service or on the company’s subscription streaming service, CBS All Access, Moonves said the proprietary SVOD service generates a better bottom line. It is the only platform with stacking rights to all CBS programs, including catalog.

The executive said he hopes All Access will reach 4 million subs by 2020 — a goal that could be realized when the service begins streaming select NFL games.

“The more subs I get there, the better I like it.”

Indeed, while calling Netflix a “friend,” Moonves quipped CBS’s much-anticipated launch of “Star Trek: Discovery,” the latest version of the famed sci-fi franchise, was licensed globally (except in Canada) to the SVOD pioneer, in exchange for assuming all of the show’s production costs.

The series debuts next year on CBS and then streams exclusively on All Access.

“Basically, 'Star Trek' is going on All Access for free,” he said. “Now, that’s a great business model.”

Moonves said the success of past seasons of “Star Trek” and “The Good Wife” on Netflix underscored the franchises’ value to SVOD and All Access in attracting a different audience (i.e. cord-cutters, cord-nevers, etc.) than broadcast TV.

“It’s a bit of trial and error. We’re trying different shows.”


About the Author: Erik Gruenwedel

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