CBS Corp. (CBS) Chief Executive Les Moonves said Wednesday that advertising sales negotiations in advance of the fall programming season are well underway and the numbers are coming in where he wanted them.
"A lot of deals are going to be done this week," said Moonves at an investor conference in New York City. "It's a very strong marketplace."
Meanwhile, Moonves is also focused on the subscription side of the business as the rise of the Internet disrupts the traditional economics of media and raises questions about how companies like CBS will monetize their content on the web.
"We're only getting pennies on the dollar for online at this point," said Moonves about the company's experiments in ad-supported web video offerings.
Moonves said he supports "TV Everywhere," the pay-TV industry's efforts to move its subscription model online through a web authentication system that would only allow access to programming to users who can confirm their TV service subscription with a distributor like cable or satellite providers.
As the focus on subscription models grows along with online video, broadcast TV network owners are seeking subscription fees from distributors--known as retansmission or retrans fees--that are more in line with those received by their cable network counterparts. For his part, Moonves has long said he expects CBS to receive $250 million annually in retrans fees by 2012.
On Wednesday, Moonves said he now thinks that figure may be conservative, and it doesn't include retrans fees that may be paid to CBS by its affiliates in return for its programming.
Moonves was an early proponent of retrans fees in the industry after CBS was separated from Viacom Inc. (VIA), which owns a stable of popular cable networks. Many media conglomerates historically have received compensation for their broadcast programming through the subscriber fees paid for their cable networks, but CBS lost that leverage in the separation, becoming more of a pure-play broadcaster.
More recently, companies that own both cable networks and a major broadcast network, like The Walt Disney Co. (DIS), which owns ABC, and News Corp. (NWS, NWSA), which owns Fox, have become more vocal about receiving retrans fees as their ad businesses have lagged.
"ABC has been very proactive," said Moonves. "So has Fox, and Comcast Corp. (CMCSA) even went out and bought a network," he said, referring to Comcast's deal to take a majority stake in NBC Universal.
Moonves said broadcasters deserve a larger piece of the subscription pie, since broadcast programming commands the largest TV audiences and broadcasters pay large amounts of money for the rights to the most popular, live TV programming, like sports.
He said distributors, which have resisted paying retrans fees, will ultimately get the money to pay these fees from cable networks that are overcompensated for their small audiences.
"Our distributors are smart, and they're going to ensure that people get what they want to watch," said Moonves. "I don't think they plan on passing it on to consumers. Nor will they cut their profits. I don't think we'll see that anytime soon."
He noted that the average U.S. household has access to 150 channels but only watches 12 to 15 of them--a statistic that if often pointed out by proponents of so-called a la carte programming, which would allow consumers to pay for only the networks they want, without buying the traditional programming bundle that has long been the mainstay of the industry's pricing model.
Moonves said he doesn't support a la carte pricing for TV. Also, he said he doesn't think regulators and lawmakers will get involved in negotiations between TV content providers and distributors.
On Apple Inc.'s (AAPL) iPad, Moonves said CBS hasn't reached an agreement with Apple to make its programming available on the device, but he said the company is willing to experiment with any distribution model that offers an attractive pricing for its content.
Moonves said he's not sure whether consumers dropping their pay-TV subscription to use only online media--a phenomenon known as cord-cutting--is a real threat to the TV industry.
"I'm not a believer that cord-cutting becomes a major player, but I'm certainly not ignoring it," he said.
Moonves said there are no discussions at CBS about going private, although several media companies recently have announced go-private transactions, like Mediacom Communications Inc. (MCCC) and Emmis Communications Corp. (EMMS).
"Sumner Redstone likes owning public companies, and that's his call," said Moonves, referring to the controlling shareholder of CBS and Viacom.
Moonves said CBS still may be interested in divesting radio stations and possibly some TV stations in smaller markets, but he said the company also could possibly consider acquiring TV stations in larger markets if they became available.
"Maybe some NBC stations? Just kidding," said Moonves. He said Comcast's deal for NBCU isn't a threat to CBS, and he expects Comcast's top executives to do a good job managing the media conglomerate.
-By Nat Worden, Dow Jones Newswires; 212-416-2472; email@example.com