Netflix Is a Friend, Content Is Still King: CBS' Moonves
Over-the-top providers like Netflix are changing the business, but major producers aren't worried because top content will always generate a premium price, CBS Corp. chief Les Moonves told CNBC on Monday.
"Some of the money will be shifting in the future, some of the money has already has been shifted," Moonves said on "Squawk on the Street."
"We sell a lot of content to Netflix. We believe in Netflix. While network advertising may eventually shift, it'll shift into other areas where we will get paid. No question about it."
The key for major media companies like CBS, he said, is to continue producing top quality content. "You'll get paid differently than you do today, but you'll always get paid. Content wins."
"What is important is to be close to Netflix, which we are," he said, adding that CBS wants to sell Netflix "what they want."
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"We're in constant conversations with them about new content and continuing content," he added. "We view Netflix as a friend, as somebody who is paying for our content. And yes, the game is changing, but we are changing with it."
When asked about the composition of CBS revenues in a Netflix world, Moonves said the service could eventually offer an incremental revenue boost to his company's core business.
Moonves estimated that streaming companies like Netflix and Amazon will bring "hundreds and hundreds and hundreds of millions of dollars extra" to the table, "revenue that didn't exist just a few short years ago," while re-transmission fees are expected to bring over $1 billion to CBS by 2017.
"I think that's one of the reasons our stock is performing so well," he added.
One company that has created problems for CBS is Aereo, although Moonves dismissed the company as "not a serious threat."
"We think it's an illegal service. They are taking our signal and they're not just passing it on to people, they are charging people for passing on our signal, without giving us any money. We think that's illegal," he said. However, "the amount of subscribers they have is very, very small so it's not a serious issue."
In April, News Corp. threatened to move its broadcast network to cable, Moonves did not dismiss this as a possibility. "If the business model is not working for us, if the courts do not vote for us, then we can move over to cable. But it's not something we lose sleep over."
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In terms of network advertising, Moonves expects that the industry will finish the season's most watched network and win the important 18-49 demographic. He said the company is "pretty cocky" going into the up-fronts, where advertisers get a taste for key network offerings.
"All the jokes about CBS being the 'old fogey' network are over," he said.