Advertisers may be waiting for consumer demand to really get in gear, but they haven’t quit advertising. CBS Corporation CEO Les Moonves told the UBS media conference in New York that business remains strong.
“Our scatter market remains in the mid-teens. It’s nice to be the #1 network, because I think the majority of the scatter money is coming our way. Some of our competitors are not doing quite as well,” Moonves said. “Could there always be more demand? You always want more demand, but frankly, as we head toward the holidays we’re seeing that demand is picking up again. The first quarter looks extremely promising, so we’re feeling really good about advertising both nationally and locally.”
The CBS chief noted that there have been very few cancellations for Q1. “Right now, if you look at where our ratings are, you don’t want to cancel a CBS show. You don’t want to cancel a CBS show and then have to come back later because you know you will pay more than you paid in the Upfront. So we’re seeing pricing holding, partially because of our ratings, partially because of what people are looking at in ’12 – there’s going to be obviously a lot of activity with the political world as well as the Olympics. There’s going to be a tightening of inventory.”
Moonves was also upbeat on the new revenue stream of retransmission consent fees. He said that revenue stream should exceed $250 million in 2012 – and that doesn’t include anything for reverse comp from affiliates, which CBS is seeking as affiliation contracts come up for renewal. Moonves said the reverse comp number starts getting “really significant” in 2013 and even more in 2014, although he declined to give a public number.
Right now, Moonves said, all of the retrans and reverse comp money is dropping to the bottom line. In the future, he admitted, some will go to cover increased sports rights costs. See the related story on the escalation in NFL rights fees.