CBS CEO Forced To Admit Cheaper 'Skinny' TV Bundles 'Inevitable'

from the wake-up-and-smell-the-Millennials dept

CBS CEO Les Moonves hasn't always been a huge fan of change. The CEO likes to whine a lot about how the television landscape is shifting, whether that's the fact that Netflix doesn't have to share viewership numbers in the subscription streaming age, or the way Dish is giving users what they want with DVRs that automatically skip ads. Moonves is also a big fan of pouting and claiming CBS will pull all of its broadcast content off the air if the network doesn't get what it wants (a man, in a very nice suit, threatening to take his ball and go home).

But even the change-averse CEO this week was forced to admit that the industry can no longer charge hundreds of dollars for hundreds of garbage channels and continue to call that value and innovation in the face of streaming competition. For all his myopia, Moonves at least has acknowledged that the shift to so-called "skinny" bundles is "inevitable":

"You’ve heard the cliché over and over again, people are tired of paying for things they don’t want to watch. That’s finally going to change. Someone’s going to figure out how to do this and how to give people what they want to watch and it’s not for $100 a month, it will be for $35 or $39 dollars a month where you’ll really get the 12 to 15 or 18 channels that you care about. And not get the karate channel for 25 cents a month."

Somebody did try to do this named Aereo, and it was sued into oblivion by CBS and others for its trouble. Other companies like Verizon are also trying to do this, but have been sued by broadcasters for trying. So to be clear, CBS believes "somebody" needs to shake up the stale cable bundle, but it should be CBS that does it.

To Moonves' credit, CBS has done a lot more than other companies to try and embrace the streaming video revolution. CBS launched its own $6 a month "All Access" streaming service in 2014, and in 2015 followed HBO's lead and offered a standalone Showtime streaming platform for $11 a month. CBS is also battling with Facebook, Verizon and others for new NFL streaming rights, and is planning to relaunch a new "Stark Trek" TV series that will be made exclusively available to CBS streaming customers. CBS hopes to bundle all of this into one giant package that bypasses the cable industry entirely.

That's in notable contrast to broadcasters like ESPN, which has pretending that skinny bundle defectors are old, lame customers nobody wants anyway. Given ESPN benefits from having a channel many don't care about forcibly included in core cable lineups, it has been notably more aggressive in defending TV's status quo.

The problem CBS and other broadcasters will face is they continue to believe that streaming content exclusivity is the key to television's future, and that consumers have an unlimited budget to subscribe to dozens of streaming services to get the content they're looking for. The more fragmented content availability becomes, the more likely consumers are to avoid the hassle and cost of hunting and pecking through confusing and often shifting exclusivity windows -- and revert to piracy.

Filed Under: cord cutting, les moonves, skinny bundles, tv
Companies: cbs

CBS Blames Netflix For Its Own Secrecy Over Streaming Video Numbers

from the I'll-show-you-mine-if-you-show-me-yours dept

After spending the last few years suing the hell out of every and any disruptive TV innovation on the horizon (from Dish's Hopper to Aereo), CBS recently announced the launch of its own "All Access" streaming video service. The service, only available in 14 metro markets, lets users view CBS content the day after it airs on traditional television -- with advertisements included. It's a somewhat shaky value proposition, and when pushed this month to disclose how many subscribers the service has signed up since its October launch, CBS CEO Les Moonves not only refused to get specific, he felt the need to throw a jab at Netflix:

"Moonves would say only that CBS All Access was “ahead of projections,” but acknowledged that could mean as few as 10 subscribers...I've been extremely impressed with the product,” he said, adding that its subscriber base would grow as more affiliates sign up to provide a live feed of their stations’ programming over broadband...Pressed for a hard number of subscribers, Moonves replied, "When Netflix tells you how many people are watching House of Cards, we’ll tell you how many subscribers we have."

It should be fairly obvious that when you're a subscription service, ratings matter less than when you're a traditional broadcaster dealing with advertisers, but this faux outrage at Netflix secrecy was the tone CBS took for much of last week. Case in point is CBS's chief researcher David Poltrack, who couldn't help taking shots at Netflix's original series viewership numbers:

"The average adult watches 5.2 hours of content on Netflix per week, 3 hours of which are spent watching television programming of some kind. Netflix’s original series account for 6.6 percent of that viewing, David Poltrack, CBS chief research officer, said at a UBS conference today in New York. "Self-reported behavior is always subject to error,” Poltrack said. “But it’s all we have. If Netflix disagrees with anything I’m about to report, I welcome them to provide anyone with the correct numbers."

The irony is that CBS is part of an industry that's been intentionally burying its head in the sand when it comes to emerging cord cutting trends for years now, with companies like Nielsen lagging on tracking viewing on tablets and phones, and often obscuring data that tells the industry things it doesn't want to hear. Namely, that the current cable TV cash cow model has a hard expiration date that's coming up faster than executives think. Now contrast CBS's ratings and secrecy-obsessed mindset to Netflix, which points out that ratings aren't as important to the company because they can hinder the creation of good content:

"The reason we don’t give ratings is not to frustrate the press,” said (Netflix chief content officer Ted) Sarandos. “It’s an irrelevant measure of success for us."..."Maybe it has been necessary for the business of entertainment, but it’s been terrible for the creative side of television," he said. "I do think that the ratings discussion has been negative for television."

The end result has been the heavy catering to the lowest common denominator (oh hi, didn't see you standing there, reality television). Note that Netflix isn't saying ratings are worthless, just that they've traditionally been taken too seriously, and this logic only extends so far. Netflix last week premiered its $90 million magnum opus "Marco Polo." It has the second-most expensive budget on television right now, behind only HBO's "Game of Thrones." Early reviews are rather mixed and Netflix obviously isn't going to ignore viewership numbers for a venture of that scope, but the point remains that the traditional cable and broadcast industry has been so obsessed with ratings (quite often incorrect ratings telling them what they want to hear), it has sometimes struggled to see the forest for the trees.

Filed Under: david poltrack, les moonves, numbers, ratings, streaming, ted sarandos, tv
Companies: cbs, netflix

Up Is Down, Day Is Night, And Aereo's Shut Down Is 'Pro-Consumer' According To CBS CEO

from the and-by-pro-consumer-you-mean-pro-screwing-the-consumer dept

Les Moonves, CEO of CBS, was one of the more vocal network execs leading the charge against Aereo. He was the one insisting that CBS would move its content off of the public airwaves if Aereo won -- to which many people said that sounded like a good idea, so that others could use that valuable spectrum. Of course, when talking to his investors, Moonves also admitted that an Aereo win would have no real impact on the company, revealing the truth of the matter.

Either way, it's no surprise that he'd be delighted by the victory over Aereo. What gets ridiculous is when he claims that it's a "pro-consumer thing." How, exactly, is that the case? If you look at the comments from just about any Aereo user following Aereo's decision to "pause" the service this weekend in the wake of the ruling, it certainly doesn't look particularly "pro-consumer." Aereo user and GigaOm writer Jeff Roberts has what might be the best explanation of how horrible this is for consumers:

But while CBS and ABC investors may be throwing around high fives at the sop from the Supremes, the average consumer just took a bath. Not only did the court just stick it to them by protecting the TV industry’s bundle rip-offs, consumers also lose access to a marvelous technology.

Aereo, you see, was different. It gave urban dwellers like me a cheap way to see over-the-air shows (which the broadcasters send out for free in the first place, don’t forget) on their computers and phones.

The service, to be sure, was from perfect. The show streams could be choppy, and in the case of sports, the short time delay could be frustrating — I would sometimes learn about a goal on social media right before seeing it on Aereo. And it lacked the lazy, channel-clicking pleasure of TV.

But Aereo did point out what could be: a commonsense way to watch TV over the internet at a reasonable price. Now, we’re stuck instead with the TV industry’s over-priced bundles and, in the case of mobile, a confusing and convoluted “TV everywhere” system that seeks to replicate an out-of-date form of linear TV watching that no one wants in the first place.

You can claim that the networks' win in the Supreme Court was "good" for the broadcast industry (though I'd challenge that assertion too), but to claim in any way that it was "pro-consumer" is just clearly out and out ridiculousness by Moonves.

Filed Under: consumers, copyright, innovation, les moonves
Companies: aereo, cbs

CBS Once Again Threatens To Move Content Off The Air If Aereo Wins; Why Is That A Problem?

from the give-back-the-spectrum dept

As the Supreme Court gets closer to hearing the Aereo case, CBS appears to be ramping up the crazy rhetoric, with CEO Les Moonves once again threatening to take its content off of its over-the-air CBS flagship and move it elsewhere.

CBS Chief Executive Leslie Moonves said Tuesday that his company's namesake broadcast network could go "over the top," or be delivered via the Internet, if Aereo's model of streaming over-the-air programming is ruled legal.

Of course, Moonves has made nearly identical threats in the past, promising a year ago that it might just move all its content to cable if Aereo won. Elsewhere, CBS has admitted that an Aereo victory wouldn't really harm the company, and actually might spur some innovation.

As we pointed out last time, if CBS is really so clueless that it thinks abandoning the free handout it was given by the US government in terms of a massive chunk of spectrum is the right way to respond to something like Aereo (which only increases the viewers of its free, over the air broadcasts) well, then by all means go for it. I'm sure plenty of others would leap at the opportunity of making use of that spectrum, either for broadcasting other content, or putting it to even better uses.

If you haven't seen it, you should take a quick peek at the spectrum allocation chart for the US. You'll quickly notice that there are some giant blue blocks, compared to basically the entire rest of the chart which is divided into tiny, tiny pieces. Those giant blue blocks are the spectrum that the US government handed out for free to radio and TV broadcasters, in part with the promise that those companies would broadcast content for free for the public good. Here, Moonves is more or less admitting that, despite that free handout (worth many billions of dollars if that spectrum were to be sold on the open market) and despite the requirement that content be broadcast for the public good, he's willing to throw all of that away, because a tiny startup is getting his programming to even more viewers? Really? Does he even realize how ridiculous that sounds?

Either way, as we said last time, it's time to call his bluff. If little tiny Aereo will have him deserting that spectrum, why not ask him to hurry up so that we can put that spectrum to much better use.

Filed Under: copyright, les moonves, network television, over the air, spectrum, tv
Companies: aereo, cbs

CBS Admits Aereo Supreme Court Win Wouldn't Hurt CBS, Might Make Things Better For Everybody

from the we-really-feel-for-you dept

Last year CBS joined a number of broadcasters in whining incessantly about how if Aereo was allowed to continue living, the "struggling" networks would be forced to pull their content from over the air broadcasts and move to cable. It's part of a long, long history of broadcasters pretending that if things don't go just they way they want them to, they'll surely go out of business. The threat to pull broadcasts was aimed at scaring Congress into passing protectionist legislation, and as we noted at the time it's something CBS should just shut up and do -- given the public could probably come up for better uses for their spectrum.

After insisting for some time that big bully Aereo will drive poor little CBS out of business (the same CBS that posted record earnings last year and 20% higher profits in the fourth quarter), it's rather amusing to see CBS CEO Les Moonves insist in an interview with CNBC that CBS won't feel any financial impact from a Supreme Court win. In fact, Moonves notes the win will likely result in a slew of new innovative products as cable companies -- and in response the networks themselves -- rush to follow Aereo's lead:

"Look, we expect that the Supreme Court will do the right thing and side with the people who are providing the content. Not the people who are taking our content and using it illegally, which is our point of view. However, if that should happen, if the worst should happen, there are so many other alternatives that will not; so this will not affect our bottom line. Obviously the networks collectively could do their own version of Aereo, there's a way to put our signal on cable without putting it over the air. There's also over-the-top for us. So, there are many, many alternatives to allow people to receive our signal no matter what happens. It's something that the Supreme Court will decide, but it's not anything that we're deeply concerned about because we have alternatives."

In other words, an Aereo Supreme court win not only wouldn't dent CBS in the slightest (something we already knew), it would result in a variety of new ways for people to receive content. In fact, it seems like an Aereo win would probably be good for pretty much everybody but Aereo. Should Aereo win, they would suddenly face all of the satellite, cable and pay TV companies offering similar or better services over the Internet to help slightly reduce retransmission fees. That would in turn result in broadcasters coming up with more innovative Internet TV services of their own to balance any retransmission fee losses.

More products, more options for consumers, more innovative services, more money for everyone and less time in court; it sounds like a real nightmare scenario for CBS and everybody involved.

Filed Under: broadcast, cable, les moonves, supreme court, television
Companies: aereo, cbs

CBS Tells Court: No One Could Possibly Read Our Statements 'We Will Sue Aereo' To Mean We Will Sue Aereo

from the uh,-nice-try dept

You may recall that back in April we wrote about CBS threatening to sue Aereo if it launched in Boston, as announced. We quoted CBS's Dana McClintock, exec VP of communications, who said on Twitter:

We will sue, and stealing our signal will be found to be illegal in Boston, just as it will be everywhere else.

Seems like a pretty clear and definitive statement. CBS CEO Les Moonves said something similar in a conference call:

If they put up another signal, we'll sue them again.

Aereo then did exactly what it should: it sued first, seeking a declaratory judgment that its service was legal and that it could launch in other markets without fear of expensive lawsuits from CBS. This is what the whole declaratory judgment setup is for. Exactly cases like this where one party threatens another in an effort to scare them off by the threat of expensive court battles.

However, CBS now, hilariously, is trying to claim that when it made those statements, it didn't really mean it would sue Aereo, so there's no controversy and the case should be dismissed. Let me just repeat this one for you. CBS is claiming that when two of its top execs said "We will sue" and "we'll sue them again," it didn't actually mean that it would sue. Wow. That's a special sort of chutzpah.

Instead, CBS claims that Aereo should sit pretty and wait to be sued:

"If the threat of litigation is as imminent as Aereo claims, it will have every opportunity to defend its actions if and when it launches in other cities and if it is sued in those jurisdictions."

Um, that's the whole freaking point of declaratory judgment actions, to avoid having to sit and wait to be sued, so that a company can get on with its business. CBS seems to be admitting here that it's threatening Aereo just to mess with its business plans. How nice.

How about the direct statements from the execs? Eh, what's a little public threat of lawsuits between execs and the press? Certainly not a serious threat, right? Concerning the McClintock statement, they claim that his statement was only referencing Boston, so it's not like it really matters.

Mr. McClintock's "threat" clearly is contained to Boston; his only reference to other locations is the vague assertion that Aereo “will be found to be illegal" "everywhere else" – hardly a concrete promise that any of the named defendants intends to sue Aereo in some other location.

Er, actually, yes, read the quote again. It's a pretty clear statement that Aereo will be sued "everywhere." How about the Moonves quote?

One simply cannot read what Mr. Moonves actually said and say with any certainty – much less with the level of concreteness necessary to sustain a declaratory judgment action – that CBS announced an intention to sue Aereo in any city other than Boston.

Um, again, Moonves's quote is pretty clear that they will sue anywhere Aereo shows up. He said "if they put up another signal, we'll sue them again."

I guess you can give CBS's lawyers creativity points for trying.

Filed Under: copyright, dana mcclintock, declaratory judgment, les moonves, threats
Companies: aereo, cbs

CBS Says It Could Move To Cable In A 'Few Days' If Aereo Wins; Receives Several Offers To Help Pack Its Bags

from the a-forwarding-address-really-won't-be-necessary dept

CBS has officially joined the chorus of angsty executive voices expressing their displeasure with Aereo by threatening to take their ball and go cable. Only this time, Moonves really means it.

CBS CEO Les Moonves has said before that he’s talked with New York cable operators about taking his network cable-only if Aereo is allowed to keep streaming what it broadcasts on the internet, but now he’s saying that he could make the switch in as little as a few days "if we are forced to."

"Forced to?" What a small-minded, self-serving, overly dramatic "threat." I'll join Mike and a majority of our readers in inviting Moonves to go do exactly that ASAP. Stop arsing about in court and just take that shiny ball of yours and cram it into the overcrowded cable market and see exactly who notices your departure or arrival.

By taking free CBS broadcasts off the airwaves, Moonves says, "about 10 percent of America will not get our signal and I don’t think they will like that."

And when people out there in flyover country (or wherever Moonves imagines this 10% lives) find themselves short a free TV signal, do you really think they're going to be pissed off at an antenna manufacturer whose only sin was its cord was "too long?"

In case Moonves might feel such a question purely rhetorical, allow me to point out the obvious: they will blame the station that went "off the air" for reasons even the courts are having trouble understanding. CBS will be the villain, along with FOX and whoever else decides the only way to compete in a market is to exit it.

And, yes, CBS is still claiming the courts will find "stealing" its precious signal "illegal." So far, this doesn't seem to be happening. If CBS really wants to play chicken with Aereo, I can only suggest it's not doing it nearly fast enough. Go ahead and give up the free airwave access and the enviable spot as a big fish in a rather limited pond and become just another number out of hundreds, distinguishable only by the number of executives suddenly grumpy they're running a cable channel rather than a network.

Even if Aereo cuts these channels out of retransmission fees from cable operators, who cares? This was the networks' short-sighted decision, one based on wringing money out of something they give away for free to anyone without cable. If Aereo is the cord-cutter's best friend, what does jumping to cable accomplish? If that's the scenario, CBS is better off losing the retransmission fees and staying on open airwaves where it takes nothing more than an antenna to access its programming, rather than exiling itself to a service people seem more and more willing to abandon.

If CBS thinks threatening to move to cable is going to turn the public against upstarts like Hopper or Aereo, it really has no idea what the public actually wants. It will simply turn itself into a lumbering villain at best and gone-but-barely-remembered also-ran at worst.

Filed Under: les moonves
Companies: aereo, cbs