Don’t count CBS chief Leslie Moonves among Hollywood’s Netflix haters.
The CBS Corp. chief gave the streaming giant credit for revving up the value of TV shows in international markets thanks to its worldwide expansion push. The arrival of Netflix, along with Amazon and other SVOD services, in crucial regions like Europe and Latin America has greatly expanded the number of buyers for content, which has been good for content owners like CBS Corp.
“This has changed the world tremendously,” Moonves said Tuesday during his Q&A at the Goldman Sachs Communacopia investor conference in New York. “We’re big fans of Netflix. We don’t think they’re eating the world or trying to put us out of business. … They’ve made the entire world much more competitive and driven up the price of premium content a great deal.”
There has been much discussion among Wall Street analysts about Netflix’s original content strategy and whether that will mean less money flowing to Hollywood studios for rights to new and older series. Moonves cited the deal CBS recently struck with Netflix for rights outside of North America to the entire “Star Trek” canon, including the new series coming next spring to CBS’ competing CBS All Access SVOD services.
The price Netflix paid for the new “Star Trek: Discovery” series (sight unseen as the show went straight to series) will cover the show’s production costs.
“I go to bed at night a lot happier knowing that ‘Star Trek’ is 100 percent paid for before it goes on our All Access service,” Moonves said.
“Star Trek” is an unusual case because of the built-in value of the brand name, but it still reflects the shift in dynamics for content providers and network operators like CBS. More and more, the hefty profits in TV come from owning programming that can be sold downstream in syndication, digital and international.
“The back-end is becoming as big as the front end,” he said. “There’s now so many ways to slice and dice a piece of content.” That’s one reason why CBS is focused on expanding the scope of its CBS Television Studios operation to field projects for non-CBS networks.
“I would hate if we had a massive hit on NBC,” he said. “That would kill me but we’d probably make a lot of money at the end of the day.”
Moonves emphasized that ownership of CBS and Showtime content is crucial for the company. Showtime is in the midst of expanding its international footprint with broad content licensing pacts showcasing the Showtime brand name for the first time overseas. But “Homeland,” the pay cabler’s signature drama, can’t be part of those packages because it is owned by 20th Century Fox TV.
Showtime is also looking to do more business in the streaming arena. A worldwide version of the stand-alone Showtime streaming service could be in the offing, Moonves said. That gives them even more incentive to own as many of the cabler’s shows as possible.
Other topics raised during the session included:
Political advertising: Moonves said local political advertising dollars in many CBS O&O markets have been strong, despite a warning issued this week by Sinclair Broadcast Group that revenue from the 2016 election cycle may fall short of expectations. Spending by Donald Trump’s campaign has been low by past presidential election standards but state-wide Senate and gubernatorial races have been strong, as has demand for issue and initiative advertising.
NFL streaming rights: Moonves reiterated that he hoped to strike an online streaming deal with the NFL at some point. At present, CBS’ NFL games cannot air on its All Access platform. Moonves said he had no concern about the Twitter simulcast of “Thursday Night Football” games. The debut of Twitter’s game coverage grabbed about 250,000 viewers compared to 15 million-plus for CBS. The NFL sought a huge fee when it shopped the “Thursday Night Football” streaming rights earlier this year — making it prohibitive for CBS to bid for the package. But Moonves sees progress ahead. “There are things they want from us and things we want from them,” he said. “Eventually (a deal) will happen sooner (rather) than later.”
Starz: Moonves said CBS considered acquiring the Showtime rival before Lionsgate set its merger agreement out of a desire to expand its ability to create more content. The idea would have been to continue to operate both brands, under the direction of Showtime Networks CEO David Nevins. Because of the ties between Starz majority shareholder John Malone and Lionsgate (in which Malone is an investor), Moonves said he knew they were unlikely to reach a deal. “It was interesting to talk about.”