CBS continues to keep its options open when it comes to buying assets — including CNN, if AT&T decides to sell after it acquires Time Warner.
“We feel strategically complete…we don’t need any M&A,” CFO Joseph Ianniello told analysts in the company’s quarterly earnings call when asked about potential acquisitions.
Still, he added — without citing specifics — that “we look at everything in the marketplace.”
CBS chief Les Moonves used much of the call to crow about CBS’ prospects — especially in digital.
CBS All Access and Showtime’s digital platform will together have more than 4 million subs by year end. As a result, he calls his target to hit 8 million by 2020 “quite conservative now.”
Moonves also talked up his just-announced plan to introduce a 24/7 sports streaming service similar to the company’s CBSN news offering.
“We think sports fans are looking for something like this, and that opportunity is significant,” he says.
It’s “in a very preliminary stage of formation,” he says. But “CBS is a big player in the sports world” and he plans to “differentiate ourselves from ESPN and Fox Sports.” And “we can keep costs relatively minimal because we already have a great infrastructure for sports, like we did with news. So the chances for profitability early on are good.”
Speaking of sports, Moonves said that Showtime will offer the pay-per-view heavyweight championship boxing match between Floyd Mayweather and Conor McGregor via cable, DBS, telco, streaming providers — including ShowtimePPV.com and UFC.tv — and in movie theaters via Fathom Events.
He expanded on his announcement earlier this evening that CBS All Access will launch initially in Canada in the first half of 2018, followed by “additional countries on multiple continents shortly thereafter.”
“Over time we will add content from across our corporation to make our service more and more attractive,” he says. “we’re very aware of the international success other streaming companies have had. We now see a huge opportunity for CBS to go direct to consumer on a much bigger scale worldwide.”
The company just added CBSN to All Access and, Moonves says, the company making it available “as a stand alone channel in skinny bundles as well.”
Still, CBS’ heart remains with broadcasting — especially when it looks at advertising.
In the recent upfront market “we definitely saw digital money move to broadcasting,” Moonves says. Specifically, “a lot of money is going into” The Late Show With Stephen Colbert, he says. “That’s a huge difference from where we were previously.”
CBS sold a greater volume of its ads in the latest upfront market than it did last year. “Plus we got pricing increases in the high single digits,” he says. “And in morning and late night did even better with pricing increases up double digits.”
Moonves calls it “standard” for advertisers to buy based on audiences they reach over seven days, up from three. “And for the first time there are some deals that get us paid through 35 days. This is a major positive change for us.”
While he likes CBS’ ad sales, he says he’s encouraged that the company is less dependent on them. Just 40% of the company’s revenues now come from advertising which means it can be “faster growing and more reliable.”
The CEO adds that “broadcast is better than cable…The NFL has always stated: There’s a reason the Super Bowl is always on network television. Nobody has the reach that we do.”