CBS Loves Apple TV, in Theory
Yesterday’s earnings call was no exception. Here’s the full exchange between the CBS CEO and analyst Anthony DiClemente, via Seeking Alpha.
Anthony J. DiClemente — Barclays Capital, Research Division
Okay. And then one for Les. You — I’m sure — you may have seen that Apple TV added Hulu onto its platform this week. I’m just wondering, when you think about Apple, are you in any way philosophically opposed to offering CBS on the Apple TV platform? And I know I — just from prior experience, I’m sure your answer will have something to do with getting paid for your content. But more specifically, is there anything you need to see or specifically anything you need to get in order to be convinced that that’s a smart strategy for CBS?
Look, Anthony, you’ve — we’ve had this discussion many times before. You’re right, it depends what the terms are, it depends what we get paid for. It depends on what effect Apple TV would have on either our advertising, our syndication or our retrans, which are our three main buckets of revenue for our content. So if it fits in well, like Netflix did and Amazon did, we’re happy to discuss it. If it doesn’t and we’re — they’re using our content to build a business, we’re not quite as favorable to that. So the devil is in the details. I know it sounds like a pat answer, but it’s really true.
Even in the transcript, it’s funny to watch Moonves and DiClemente go through the motions on this one. But I’m highlighting it here because it illustrates that digital video no longer seems like a conundrum to CBS and all the other big TV programmers. It seems pretty routine.
There are two main options:
Sell the old stuff: Once CBS and the other networks have aired their shows on their own networks, they’re generally happy to resell them, at nearly 100 percent profit. Recent programming goes to a la carte “electronic sell-through” stores, like iTunes; older stuff will show up on subscription services. For instance, now that CBS has stopped showing “CSI: Miami” after a 10-year run, that show is likely to end up on Netflix, Moonves said yesterday.
Sell the new stuff: If you want to run the current shows that CBS and others offer — the way the pay-TV providers do — then you have to act like a pay-TV provider, too. That means buying all of their program bundles, at market rates. Which is what Google is doing with its new Google Fiber TV service. And it’s the same proposition that Intel and other would-be “over the top” services are considering now.
It’s possible that Apple tries some brand-new option that the programmers haven’t seen before, like it did three years ago, when it was pitching a $30-a-month package for stuff that had just aired. And the new “channel-as-app” model that’s emerging on Apple’s devices and others offers some room for experimentation.
But the new semi-conventional wisdom — embraced by folks like Time Warner’s Jeff Bewkes — is that if Apple wants to get deeper into TV, it will work with the TV guys on the terms they already know.