New York Magazine's Vulture.com

Why the Revolution in TV — in Both Distribution and Consumer Viewing — Makes CBS CEO Leslie Moonves Even MORE Bullish About His Company

Sep 9, 2015  •  Post A Comment

You probably want to check out a good interview this week with CBS CEO Leslie Moonves done by former TVWeek writer Joe Adalian, who is now with New York Magazine’s Vulture.com. Some excerpts:

Adalian: “Despite all these other new revenue streams, don’t you get a little bit scared about where things are going? Ratings are way down, even at the cable networks. Cable subscriptions are trending down almost every quarter now. It sometimes feels like end-times for linear TV.”

Moonves: “I’m not just being Pollyanna-ish about this. I made a statement a few months ago: Overnight ratings are virtually useless now. When I analyze the performance of a show, it is extremely different than it was even five years ago, no less 20 years ago. We use ‘Elementary’ as an example. As a broadcast show against ‘How to Get Away With Murder,’ at first blush, it’s a moderate-performing show at best. Then you add in the C3 [and] C7 ratings, and suddenly, it’s one of the most widely DVR’d shows after the fact. That [overnight] number jumps considerably, and that brings a considerable amount of revenue. ‘Elementary’ is [also] one of the highest-selling international shows we have. Then you add in an SVOD sale, a cable sale, etc., etc., etc. Suddenly, ‘Elementary’ becomes a remarkably successful show in our eyes. It’s truly a very different world when you’re looking at the economics.”

Adalian: “But are all these different streams just allowing you to make up some of the money you’ve lost from advertisers? Or are you actually making more money than you used to from these shows?”

Moonves: “It’s more profitable than it was. Look at the CBS revenues [and] what the network has done over the last 20 years. Our profits have gone up considerably. All these technology initiatives that supposedly were going to hurt us have actually helped us. SVOD has helped us. DVR has helped us. The ability to go online with our own content, CBS.com, and the trailing episodes — all have helped us. This isn’t about replacing. Yeah, sure: Ratings are down. It’s been a slow decline, but a decline. So let’s say I knock off 30 percent of my advertising revenue from 20 years ago. That is so much more [than] made up [by] all these other sources of revenue that the profitability of these shows goes up an extraordinary amount. It’s a very different way of looking at programming than you did before, when you lived and died by reading the overnights.

“That’s not to say that I don’t wake up in the morning and still look at the overnights, and the stock price, the first thing in the morning. But the revolution is happening, and it’s happening quicker than people thought it would. Our job is to continue to produce great content. There are new and better sources of revenue all the time. And that bodes really well for the future.”

Here’s one thing that DOES bother Moonves:

Moonves: “The thing that concerns me a little bit more is the talent drain. There is definitely a talent drain going on out there. [Streaming networks] are often able to go to somebody and say, “Okay, we’re going to give you 13 [episodes] off the bat based on an idea. And we will give you more than your license fee, so you’ll be in profit right away.” And a lot of people are very attracted to that … there is no question some of the talent is now very attracted to the ten-episode arc.

“But [with streaming], you’re never going to make the kind of money that a Chuck Lorre makes on ‘The Big Bang Theory.’ You get a slight profit, but you’re never going to hit a home run. If you have a hit show with us, the ability to cash in later on it becomes a lot greater. Chuck would not be in the position he is in today, financially, without being on broadcast. Jerry Bruckheimer, the same. So there still is that great advantage to doing the network game. And look, we’re rolling with those punches. [Through CBS Studios] we’re in development with Netflix and with Amazon about original programming. What has made this company work is our ability to look forward, to say, ‘The existing business is not going away, but we better be in the new model, so ideally, no matter where they’re watching, they’re watching our programming.’ And that’s what’s happening.”

That’s just a brief sample of the interview. We urge you to read the entire interview with Moonves, which you can find if you click here, on the Vulture.com website.


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