The CBS chief isn’t prepared to stop once he persuades advertisers to pay for viewers who watch commercials as much as seven days after a show airs — a change he expects to see next year from the current live-plus-three-days. “We’re pushing eventually for live plus 30,” Les Moonves told investors this morning at the RBC Capital Markets Technology, Internet, Media and Telecommunications Conference. Viewers increasingly watch shows on DVRs, VOD, and online. As a result, for a series such as CBS’ Hostages “when you count 30 days more, the number [of viewers] almost doubles,” he says. Moonves adds that buyers should be willing to pay. “If you show the advertisers that a person is really watching them, that’s a good thing….Advertisers are paying for the eyeballs that are watching their spots.” But Disney CEO Bob Iger, for one, says it may take longer than Moonves thinks to persuade buyers to even raise the current threshold to seven days. “I’m not sure it’s going to happen very quickly,” Iger said last week. “I don’t think the advertising community is going to move that fast.”
This was one of the points the CBS chief just made to investors to promote his favorite message: that all’s well for CBS and broadcasting. He’s been lobbying to have advertisers pay for the viewers who see commercial spots on DVRs as much as seven days after they first air, up from today’s three days. And that’s “coming right around the corner, and that will be good for us,” he said at a wide-ranging Q&A session at the Deutsche Bank Media, Internet and Telecom conference. Even with the existing C3 arrangement he predicts that in the upfront market “CBS will lead in volume and CPM increases” although he declined to provide a specific target. He adds, though, that “the thing that the press writes that bothers me the most is that 18-to-49 is the only viewer the advertiser cares about…The fact is, we win total viewers by more than we win every other demographic. We welcome everybody and we sell to everybody.” He’s also enthusiastic about digital streaming services including Netflix. “House Of Cards? That’s great. I don’t view them as a competitor. We’ve talked to them as a production company about producing shows for them. So they’re our friend, not our enemy.” Netflix also isn’t the only game in town. “Amazon’s jumping in in a big, big way,” Moonves says. But CBS will stick with selling online services for its older shows, especially serial dramas. “We’re not going to risk our entire schedule.” That’s the main reason why CBS didn’t join Hulu. If the company puts a show on CBS.com that interferes with viewing at the main network “I can pull that in 10 seconds. At Hulu you can’t. Once you give it up, it’s gone. Your child has left you.”
Here’s the dirty little secret behind broadcasters’ campaign to change the way ads are sold — to include people who watch them up to seven days after they air (called C7), up from three (C3): It wouldn’t increase …
The companies bidding to buy Hulu may not want to talk to CBS chief Les Moonves. ”What are they getting and how long are they getting it?” he mused in an interview Thursday with UBS investment banking chief Aryeh Bourkoff at The Paley Center for Media. “Are they buying two years of programs for $2B? I don’t know. I shouldn’t say more — I’ll get in trouble.” CBS is the only major network that isn’t part of the Hulu joint venture. And Moonves says he’s glad he made that decision. “We want to control our content.” Online broadcasts cannibalize TV viewing and syndication and that’s something “we’re not going to do. Even a little bit. … We protect the family jewels.” But his company’s programming on premium channel Showtime is different. CBS is gearing up to launch Showtime Anywhere — a digital service for Showtime’s cable subscribers. ”We are half the way getting there,” he said. Like Time Warner’s HBO Go, Showtime Anywhere would enable customers to watch shows from the premium channel on demand via broadband including on mobile devices like tablets and smartphones. Moonves adds that, also like HBO, he won’t charge extra for Showtime Anywhere.
When it comes to the ad market, the CBS chief showed remarkable self-awareness for a media exec saying, “I know I sound a little Pollyannaish.” But he was consistent with the see-no-evil projection he made yesterday during an investor conference. “The world wants us to tell them that the sky is falling. It’s not.” He added that ”the signs are nothing like they were in 2007 and 2008. The only place we’ve seen real softening is with Japanese auto makers. And that’s coming back. … Toyota’s coming back bigger in November and December.”
ABC is challenging the decades-old system of how networks and its affiliates share ad revenue with the launch of Inventory Exchange System. Traditionally, the networks sell the majority of their ad inventory nationally on the upfront and scatter markets, while their affiliate stations get a fixed small number of units. With IES, ABC will become the first network to break the pattern by exchanging additional ad inventory with its 200 affiliates throughout the year.