After buying CNET for $1.8 billion, CBS is now looking to pare its radio group by 50 stations, which RBR/TVBR estimates should bring in north of a billion. Chairman Sumner Redstone (suffering from laryngitis on yesterday’s call) is onboard with the changes, calling it an “evolving portfolio” which is being engineered for the company’s long-term success. What’s clear is that CEO Les Moonves sees the future for CBS in producing premium content, with extensive cross-promotion as that content is distributed across various platforms to draw consumers to all of its properties – television, Internet and everything else.
“The reach from promoting CNET through CBS properties can be truly dynamic,” Moonves told analysts in his quarterly conference call. “Let me give you an example of our success so far integrating CNET and making this happen. When iPhone 3G launched this month we aggressively used CBS properties to drive traffic to CNET. CNET editors made appearances that aired more than 30 times on CBS shows, including “The Early Show,” “Entertainment Tonight,” and many local TV and radio programs. And then we added video from CBS’ Early Show to CNET’s launch coverage that day. Video streams and organic search traffic on CNET sites tripled. This is precisely the kind of success that had years ago when we bought SportsLine.com and began promoting it on CBS Sports. The mass reach provided by broadcast television and our other core businesses are some of the greatest weapons that we have to drive traffic online and we can apply the promotion power of all of our CBS properties to all of our new interactive ones,” he said.
As a veteran television guy, Moonves is still gung-ho about the future of network television, despite the current tough economic conditions in the US, which have put pressure on all ad-supported media. But he noted that the naysayers underestimated this year’s upfront. Rather than being flat, it was up for everyone, including CBS. And he said CBS came full steam out of the writers strike and showed up at the upfront with more pilots than anyone else. He also noted that pilot production was done more cheaply than, in the past, so perhaps a lesson was learned. So network television is still a good business, but Moonves is looking to leverage the strength of CBS-owned content into new media outlets.
“Acquiring CNET immediately catapults CBS to the top 10 among global Internet companies by unique visitors. Our newly expanded CBS Interactive businesses rank 8th today, versus 24th prior to the acquisition, with 160 million users worldwide and leading online brands across every important category. We like the upside of CBS Interactive going forward. At its core, CBS is a premium content distribution company and having CNET’s stable of sites in news, technology, business, entertainment, video gaming and other areas has tremendous complimentary reach where consumers are increasingly spending their time. Right now, most online revenue is generated from search – but engagement, the amount of time consumers spend with their favorite content leads to significant revenue opportunities. We believe as the Internet develops as a new medium, advertising will follow entertainment and premier content sites like ours will be the best bet to reach consumers online,” Moonves said of the online future.
RBR/TVBR observation: He may be an old TV guy, but on the conference call we could hear the level of excitement and high level enthusiasm that Moonves has for this new digital world. As he put it, all parts of CBS Corporation are now "in an interactive business and technology is our friend."