Q&A: CBS’s Leslie Moonves

PREMIUM: Leslie Moonves, the president and CEO of CBS Corporation, talks to World Screen about the programming strategies that have made CBS the most-watched network among all viewers in the U.S. for seven out of the last eight seasons. This success has translated into dollars: in 2010, CBS saw a 12-percent jump in ad revenues to $9.15 billion.

WS: I imagine that CBS’s stable management sends a consistent message out to the creative community of what to expect from the network.
MOONVES: That is exactly right. They know what they are getting. They know when they are developing a show at CBS that the people are going to be there to see it through to fruition. They know that the people who are championing their shows will be around and will continue to champion their shows, not only during development, but the year after and the year after that. The same sort of philosophy goes throughout our pipeline. Our distribution people have been here for a very long time, and when Armando Nuñez, Jr. [the president of CBS Studios International] goes into the marketplace to talk about our product throughout the world, they know that Armando is going to be there next year when the show is either a big hit, which has happened an awful lot of the time, or when it doesn’t work and there are other things that need to be done. And I think that gives people great comfort because they know we’ve delivered what we’ve promised them, and we will continue to deliver, and they trust us.

WS: How important are international sales?
MOONVES: They are very, very important. They were important many years ago and, frankly, the growth in the marketplace has been terrific. Even with tough economic times, both in the U.S. and, obviously, abroad, the demand for premium content remains very strong. And that’s very heartening. So the fact we’re doing the best content is very important to us. If you put on premium content the viewers will come and the advertisers will come and you can withstand [any fluctuation in the market].

Television is still the best bargain in town, because by and large it’s free, so even at a time when people maybe can’t afford to go out as much, television remains the constant, and you can’t replace premium content. So the numbers that Armando has brought in have been terrific. When we have a show that we produce, we look at it globally. We look at what we are going to get from a network, we look at what we are going to get internationally, and it enables us to produce it at the highest quality level, knowing we will get rewarded both domestically and internationally.

WS: While traditionally networks have waited until they had about 100 episodes to go into domestic syndication, you approached the market when you have had fewer episodes.
MOONVES: Last year we sold NCIS: Los Angeles domestically after six episodes had aired. They will air [on USA Network] a few years from now, but the sale took place as soon as it became apparent that the show was a hit. The marketplace was so strong, and it’s also quite different from ten years ago, when the domestic marketplace for dramas was not nearly as strong as it is today.

WS: Given the number of hits CBS has on the schedule, what has made the development process so good at the network?
MOONVES: There are a number of factors going into it. It comes down to a) the people who provide a good creative environment for our producers and writers, and b) knowledgeable people to schedule and market. It really is a team effort, and the fact that this solid group of executives has won for many years, and does it year after year, leads us to feel like [the system is working]. It’s a team effort throughout the whole process: it’s development, it’s casting, it’s finding the right people, it’s knowing who the up-and-coming good people are. And it does have something to do with the fact that we have terrific people who work well together—it makes for a good team, and success comes from that.

WS: How involved are you in any of those steps along the way?
MOONVES: I’m involved somewhat in all of them, depending on the steps, depending on the project. Nina Tassler is the president of the entertainment division of the network, Dave Stapf is the president of the CBS Television Studios. They are both terrific managers. They do show me scripts and rough cuts, and I get involved in the process, but they are the focal points.

WS: CBS has accumulated an attractive stable of online assets, from CNET to TV.com and of course CBS.com. What’s been the strategy in building that group?
MOONVES: The strategy has been how do we best maximize the content that is currently on the CBS network or Showtime, which is also one of our assets, and make it available either as full episodes or some offshoot of those shows. TV.com is also a social-media site for commenting on television shows. At the same time, with sites like CNET and the games site, we want to offer original content that frankly has nothing to do with CBS content. So overall you could say CBS is trying, as we do on our network and on Showtime, to put premium content in as many available places as people can get it, and the content can come from CBS or it can come from elsewhere as well.

WS: Is the industry at large and CBS in particular getting closer to being able to monetize content online?
MOONVES: There is no question. We are monetizing our content online. It will be important that online advertising grow, so that you get the same price per viewer as you do on air, so that an eyeball watching TV is equal to an eyeball watching online. Right now that is not the case, but there is no question that the online component is very important and will become more and more important as time goes on.

WS: Even though advertising is recovering, most everyone in the media business is looking to diversify their revenues, and if I’m correct, retransmission fees have become an important point for a broadcast network like CBS.
MOONVES: Yes, that’s absolutely true. A few years ago the retransmission fees were nonexistent. Now they are a major part of our lives and, once again, having a strong schedule (and that includes not only the entertainment shows, but sports as well) is a very important part of it. It leads the cable and satellite operators to recognize the value of having the networks and paying appropriately for them.

WS: Do you think the day will come when a network like CBS is valued at least the same if not more than a USA Network or a TNT?
MOONVES: Absolutely. I see that day in the not too distant future.

WS: You mentioned sports. CBS has found an innovative deal for NCAA basketball rights with Turner Sports.
MOONVES: Exactly, sports rights in a lot of areas have escalated to a very high number. Clearly they are very valuable. We were able to come up with a very original way to share the rights, because there are a number of games on the air, and made a very creative business deal. This helps all three parties involved: Turner as well as CBS as well as the NCAA. It took a lot of terrific effort on the part of our sports guys and the Turner guys, and everybody won.

WS: Even though the cost of rights is escalating, do sports still comprise an important portion of the schedule?
MOONVES: No question about it. Being able to have the NCAA Tournament, even if it’s in partnership, is still far, far better than having lost those rights. They are important to our identity, who we are and where we are in the future.

WS: Is it possible that other networks are paying too much for sports events?
MOONVES: I really don’t know. We are really very happy with what sports we have. We have the NFL, we have the NCAA, we have the SEC (the college football Southeastern Conference), we are the largest purveyor of golf on network television, we have the Masters Golf Tournament and we have the U.S. Open Tennis Championships. We are very pleased with the sports we have on the air and, frankly, we’re not looking to expand.

WS: People are getting their news in a variety of ways throughout the day. Obviously, broadcast news is changing. What do you see as the future of network news?
MOONVES: It’s hard to say. It’s obviously evolving. People get their news in a lot of different ways. So broadcast news has to look at itself as a place not necessarily only to deliver the news but also to give you a point of view, and by that I don’t mean a politicizing of it. I mean more of an in-depth look at events. Unlike the old days with Walter Cronkite, when Walter would be the main purveyor of news and you would rush home to get the 6:30 p.m. Evening News to get your information, today, by the time you get home you mostly know about [what happened during the day]. I think network news is about getting in-depth and getting more knowledge of what is going on in the world.

WS: Putting news events in context because we are bombarded with so much information.
MOONVES: Exactly, providing context for them. And certain news services do it with a political point of view, and that’s OK also—that’s why there are 500 channels, so there can be different points of view and different people who want to tell it from one side or the other.

WS: The 10 p.m. time slot is particularly important because it serves as a lead-in to your affiliates’ late news, which is a money generator for them.
MOONVES: Absolutely, that’s what the affiliates and the O-and-Os [CBS-owned and -operated stations] care about more than anything else—the 10 p.m. programming.

WS: So, given the strength of your 10 p.m. slot and of your prime-time schedule in general, tell me a little about CBS’s relationship with its affiliates.
MOONVES: Forty percent of our network consists of O-and-Os. We are a big part of that, and as you stated, clearly, 10 p.m. is very important because the local news is a major source of revenue to them. And the fact that we win most nights, if not all nights, Monday through Friday at 10 p.m., leads them to feel very good about their network and their relationship to us. Our affiliates are very important. A network is comprised of some 220 stations. It is important to us that they remain very healthy, and providing them with good 10 o’clock lead-ins, which helps their local news, then helps the Late Show with David Letterman, is good for the food chain that we are all part of.

WS: You mentioned that a number of your top executives have been at CBS a long time, but so have you.
MOONVES: Absolutely, I’ve been here since 1995.

WS: What have these years meant to you?
MOONVES: CBS is such a great place and there is such a great culture and I love working with the people I get to work with and the people I get to meet. I’m at my core a content guy, and I love the content we’re putting out there and I’m very happy here. I like coming to work every day. 

WS: Why is it that being a broadcaster today, despite fragmentation and competition from new media, is more important than ever?
MOONVES: Even though the landscape is much more fragmented than it was five years ago, or ten years ago, being a broadcaster still is the most powerful way to reach a mass audience. In a world of 500 channels, and not to mention the million or more websites that are available, the fact that a network like CBS can reach more people at one given time than any single one of them is very significant. The fact is the communal broadcasting model still is very effective. If advertisers want to reach a large part of the population, they realize the best and biggest bang for their dollars is still broadcast television. And that’s why even though the absolute [viewing] numbers may be smaller, the impact is larger than ever.

WS: What are some of the programming choices and scheduling decisions that have led to CBS’s success?
MOONVES: We really view our schedule as a bunch of building blocks, and it’s taken us a number of years and the blocks are pretty much in place. Our attitude has always been, be a broadcaster. We like 18-year-olds and we also like 60-year-olds. We haven’t been driven to a smaller demographic despite what some of the people out there may be saying. It is important to program broadly and for a mass audience with shows that have mass appeal. We have taken our time with a very specific development idea about that, and we do shows that fit with our audience. In addition, we’ve had a very, very stable management team. Most of the people that are involved with our programming are people who have been together 15, 20 years. That is very effective, and it’s worked really well for us. I know that the word “teamwork” is a cliché, but it really is in effect here, and there is a reason why our schedule seems to work year after year.

WS: In addition to having been the most-watched network for so many years, this season, CBS also started to make inroads into the much-coveted younger demographic. Any particular reason why that came about?
MOONVES: Once again it goes back to the consistency. Ultimately, at the end of the day, the 18-to-49 demographic is not the be-all and end-all to us, but if you put on very good programming, everybody will watch. Big hits are generally watched by everybody, so I think the fact that our schedule is packed with a number of successful shows on virtually every night of the week, that just tends to broaden our demographics out. Through the first of the year we were number one in every single demographic, and in some of them by a very large margin.

WS: You have a strategy of steadily accumulating programming assets, such as the CSI franchise, the NCIS franchise, and the list goes on. In the ’80s there were only a handful of revenue streams. In today’s media landscape, how many revenue streams are there for a hit show?
MOONVES: As proud as we are of broadcast, it’s not to say we could stand still and put our feet in the mud and just say broadcasting is all that matters. A few years back there were a limited number of revenue streams—you could put a show on a network and syndicate it internationally and a little bit domestically. But now the world has changed so much with online viewing and iTunes and cbs.com and Hulu and all the different platforms where you can put your content. So the idea is, yes, the network is still the mother lode and it’s still our focal point, but people are watching our shows all over the place on a lot of different platforms. As long as we get paid appropriately for them and it’s not hurting our main forms of revenue, we’re now getting paid 14 or 15 ways for the same piece of content.

WS: Showtime, which is also part of CBS Corporation, is doing very well and seems to have stolen HBO’s thunder lately.
MOONVES: HBO is still doing great, but I’m really proud of the job the people at Showtime have done. They have put on a number of very exciting original series and original sporting events that have really boosted Showtime, not only financially, but in the eyes of the world as a major supplier of premium content. HBO still does a good job, they still have some excellent programs, but now the good news is that Showtime is competitive in that area.