CBS becoming less reliant on ad dollars
Wall Street has at times been wary of CBS Corp. for its heavy reliance on advertising revenue compared to other media giants that also have stakes in subscription businesses such as cable television.
However, thanks to strong sales of its content both abroad and to new platforms, including Netflix and Amazon, and retransmission consent fees the network is now getting from distributors in the United States, CBS' revenue is starting to diversify.
Speaking at the Paley Center for Media's International Council conference, CBS Chief Executive Leslie Moonves said advertising accounts for about 64% of the company's revenue, down 8% from just a few years ago. He predicted that in five years, ad dollars will account for less than 60% of total revenue for CBS.
"We're less dependent on that and we're in good shape," Moonves said.
Moonves spent much of his discussion talking about the need for a better measurement for online viewing. Until such viewing is tracked better and advertising dollars reflect that, CBS will continue to focus on getting people to watch shows on the network first.
"We need to get an eyeball measured very accurately ... then we will be agnostic about where you watch your show," he said.
Moonves also told an amusing story about NBCUniversal Chief Executive Steve Burke. A few years ago, when Burke was still at NBCU parent company Comcast Corp., he and Moonves clashed at the Allen & Co. conference over fees CBS wanted Comcast to pay the network for their content.
"He lost his temper at me," Moonves said, adding that Burke told him, "We are never going to pay you a nickel for retrans."
Now, as head of NBC, which Comcast took over earlier this year, Burke is a believer in retransmission consent fees. On Wednesday, Burke told analysts he thought NBC would generate hundreds of millions in such fees in the coming years.
-- Joe Flint