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CBS CEO: Netflix is ‘not eating the world’

Les Moonves

Les Moonves

Netflix is not “eating the world” and has helped to drive up the price of premium content, according to CBS president and CEO, Les Moonves.

Speaking at Goldman Sachs’ 25th Annual Communacopia Conference in New York this week, Moonves pinpointed over-the-top as one of four core pillars of future growth for the company and said that CBS is a “big fan of Netflix”.

“We don’t think they are eating the world. We don’t think they are trying to put us out of business. Yes, they are producing more original content. That’s okay,” said Moonves.

“They are a competitor against Showtime [OTT], I guess. But, frankly, they have made the entire world much more competitive and driven up the price of premium content a great deal.”

Moonves said that previously it was possible to go to big markets like France or Germany and have three buyers for content, whereas “now with the SVOD marketplace there are seven, eight, nine buyers”.

He added that in the case of CBS’s new Star Trek series, which will be available on CBS All Access in the US, Netflix “bought the entire universe except for North America and they more than paid for the cost of the show.”

CBS said on its second quarter earnings call in July that its streaming services, CBS All Access and Showtime OTT have surpassed 2 million subscribers, with each service claiming roughly 1 million subscribers.

Speaking this week, Moonves said that the SVOD services are  “ahead of projections” and reiterated a combined targeted reach of 8 million subscribers by 2020 – split evenly between CBS All Access and Showtime OTT.

He added that CBS was “pretty pleased” with the 1 million each subscriber figures and said “we haven’t even come out with the big guns which is the original programming yet”.

Discussing CBS’s strategic priorities for the coming years, Moonves said they are: retransmission and reverse compensation fees; international; over the top services; and dynamic ad insertion and new skinny bundles.

“All four of them are proceeding in a very positive way,” said Moonves.