Following an announcement of the renewal of CBS’s hit “Under the Dome,” Les Moonves, pres and CEO of CBS Corp, addressed the question on every TCA critic’s mind: What’s the status with negotiations with Time Warner Cable?
“I really don’t want to negotiate in public,” Moonves replied, hours before a 5pm ET deadline Monday. [UPDATE: After this article was first published, the deadline was extended to 8pm ET.] “That’s probably not the best way to do it.” He said that conversations are happening, “as recently as 15 minutes ago with me on the cell phone to New York.” Characterizing the negotiation as “very difficult," he added, "As we’ve said, we feel like we should be paid for our programming…I hope we don’t go dark. Conversations are happening between a lot of people today.”
Probably not quite as tough, but still difficult was CBS’s maneuvering “Under the Dome’s” summer model, which included Amazon Prime access for customers four days after an ep airs. One of the questions in putting it together, according to the CBS chief: “How do you figure out financially how to put on a show of that size and that scale?” Ultimately, it came down to two components. Given that the summer network license fee is small, the hefty international sale of the show and the participation of Amazon were key. “We had to make a deal unlike any we’ve ever made,” he said. Amazon hasn’t revealed it numbers yet, but Moonves said he was assured by CEO Jeff Bezos himself that he loved the show. “It’s been a great new model, and they’ve been a great partner.”
Divulging further on business models, Moonves said players like Netflix and Amazon have changed the world of television and have resulted in more experimentation. He pointed to CBS’s new serialized drama “Hostages,” which, after its 15-ep run, will appear “very shortly on the Netflixes and the Amazons.” “Every model that we’re doing is somewhat different than it was before,” he said. “Cable has had great success with serialized drama. And that’s been helped by the Netflixes of the world and binge viewing as well. And we think that can happen with "Hostages."” Expect to see more experimenting, he said.
International production is a particular focus for the company, Moonves told critics. “Six or seven years ago, our international revenue was about $400 million. Last year it was a billion two,” he added, citing multiple channels in big markets, the enhanced competition of pay TV and the opening up of markets in Eastern Europe, Latin America and Asia as reasons for the expansion.
Addressing a big picture question about whether viewership numbers have decreased over the years, Moonves said that in fact, “the numbers [today] can be as big. They’re just coming from different places.” For instance, the premiere ep of Under the Dome garnered 13.7 million viewers, but that increased to more than 20 million after DVR, VOD and streaming—not including Amazon. “Everything is not quite being counted yet, although Nielsen is trying to get there,” he said. “The model’s never been dead. It’s just evolving. It’s changing.”
Cable networks like Showtime, on the other hand, operate with a very different model. “’Homeland’ will cost a lot more than your average network show, and you do a lot less of them, but they’re getting paid a certain amount per month,” he said. “Both are very successful. Both are very lucrative, and both are good for us.”