Moonves says CBS better positioned for OTT future than Disney, ESPN

CBS
CBS continues to work to expand its direct-to-consumer streaming. Image: Sarah Ackerman/Flickr

Amid dire predictions of the state of linear TV coming out this week, CBS chief Les Moonves said his company will benefit from the shifting viewership behaviors that’s jeopardizing linear TV networks and pay TV service providers.

“When ESPN announces they’re losing subs or Comcast announces they’re losing subs… when Bob Iger says ‘oh we’re going to be flat,’ for CBS, this is viewed as positive news,” Moonves said during an investor event today. “We are different than them, this movement is a positive for us.”

Moonves has been bullish on OTT and where CBS fits into the new content distribution paradigms. CBS was one of the first content owners to launch direct-to-consumer offerings for its national CBS network in 2014 and premium pay TV network Showtime in 2015. The company has also announced a sports OTT network in the works, and Moonves said Thursday that CBS will launch another OTT product for its Entertainment Tonight property.

“We’re going direct to consumers,” Moonves said. “What’s exciting to us about the future: some of the guys say the big bundle will be around for a while, that’s probably right. Over the top is going to get bigger and bigger—definitely right. Direct-to-consumer offerings are going to become a larger part of the world, as well as skinny bundles are going to players. The good news for us is that we’re going to be in all of them.”

Moonves noted that the economics of OTT services benefit content owners like CBS who’ve embraced new distribution models. He said CBS receives $2 per sub for every traditional MVPD subscriber, $4 per subscriber for streaming skinny bundle subscribers, and $6 per sub for CBS All Access subscribers. “Cord cutters aren’t disappearing, they aren’t going into the woods to get away from TV. They’re just going to other services,” he said.

At last count, the Showtime OTT service had 1.5 million subscribers, and CBS All Access was reportedly not far behind. Moonves said CBS All Access is now ahead of subscriber projections. He echoed earlier predictions that CBS All Access and Showtime together would garner 4 million subs by the end of the year, and will reach 8 million by 2020, adding that those numbers “may prove rather low.”

CBS plans to begin expanding its OTT offerings to international markets next year, with the launch of CBS All Access in Canada in 2018. Moonves said Australia will be the next international market it enters. Moonves said the company also plans to begin producing original local content in those international markets at a later date.

“We think it’s a great opportunity,” he said, pointing to Netflix’s pool of 50 million subscribers around the globe. “That’s a tremendous number. All Access is not going to get 50 millionbut there are people out there clearly who want this service and we’ve proven that we can do domestically, and we’ll do it internationally.”