CBS: ‘Broadcast In Better Shape Than Cable’

Remember CBS CEO Les Moonves’ projection last year that the network would hit $2 billion in retrans revenues by 2020?

Turns out that was a little conservative.

“I’m now prepared to say we will exceed our goal of $2 billion in (retrans) revenue by 2020,” Moonves said during Wednesday’s conference call to discuss second-quarter financial results.

Now, remember Moonves’ projection that CBS would hit $1 billion in retrans revenues by 2017?

Turns out that was a little conservative, too.

“We will surpass $1 billion by next year,” he said, noting that, “These are dollars that fall to the bottom line.”

While acknowledging that “we knew 2015 would be a challenge” for the network, being an off political year, Moonves said CBS expects to reap a healthy chunk of what Politico estimates will be $4.4 billion in political advertising next year.

But if Moonves remains bullish on broadcast, his enthusiasm bubbles over when it comes to digital.  “Broadband offerings will continue to drive growth,” he said.

Moonves and Joe Ianniello, COO, both touted the growth of Showtime OTT and CBS All Access.

“Every million subs (for Showtime OTT) equals $100 million of profit,” Ianniello said.

The executives sidestepped giving specifics about CBS All Access but thanks to recent deals with stations groups including Sinclair and Nexstar, CBS appears to be on track to hit 1 million CBS All Access subscribers before year end.

“Relations with affiliates remain very strong,” Moonves said. “Basically, we’re going to have the entire country before too long.”

Nonetheless, CBS will pursue distribution opportunities that don’t necessarily include affiliates.

“We have digital assets we can put out directly to the consumer and keep 100 cents on the dollar,” he said.

Upbeat projections from Moonves and other broadcast executives come as media shares suffered a drubbing Wednesday, partly the result of Disney/ABC’s lackluster second-quarter network advertising revenue performance.

Gray Television was a bright spot in the broadcast advertising picture Wednesday, posting record second-quarter results, largely thanks to acquisitions.

Despite the lackluster broadcast advertising environment, Moonves remains upbeat.

“Proof of purchase by the Internet is not yet there as it is on broadcast,” he said. “Most industries will not veer away from broadcast.

“We still feel very bullish. There’s a reason year after year our CPMs go up — broadcast is in better shape than cable.”