Moonves: TV And Online Pricing Heading Towards Parity

Some years ago, then-NBCUniversal chief Jeff Zucker authored that memorable warning about media companies needing to be careful in trading analog dollars for digital pennies. Economically, it didn’t make sense to urge advertisers to shift budgets online en masse when the cost of buying TV was still so much higher.

Zucker later said the gap had closed to analog dollars and digital dimes. But the spread, of course, remained massive.



On Wednesday, CBS CEO Leslie Moonves indicated dollars are about to become platform neutral. No more analog-digital divide.

Within three to five years, there will be parity pricing for ad positions in “NCIS” whether on CBS or streamed on, he said in an interview on CNBC.

So, “we won’t care where you watch the shows,” Moonves said.

Gaining equal pricing is almost a business necessity now, and networks will surely have to find a way to convince media buyers to play along. In five years, 18-year-old collegians blowing off work in the library with an episode of “Big Bang Theory” on a laptop will become 23-year-olds – hopefully with jobs plentiful thanks to a stronger economy – who have more time to consume media, but feel comfortable going without a TV.

“You go on a college campus today, most kids are watching their shows online,” Moonves said.

Moonves began the interview saying he didn’t want to talk about winners and losers in the recent standoff with Time Warner Cable (TWC) that had CBS-owned local stations off the air for a month.

“At the end of the day, there are no heroes … and I’m sure the public resents both sides and feels like it (was) two big companies fighting it out,” he said. “However, it was important that we take a stand.”

The position was that CBS content is so valuable to distributors, CBS deserves to be paid for it in line with -- if not better than -- a top-tier cable network. Moonves has made the point many times.

He may not have wanted to declare victory, but he did in noting CBS can continue to offer TWC its network for a fee and collect money from competitive digital distributors.

“One of the things that we won, one of the things we were fighting for, is the ability to slice and dice our content all over the place -- to put it on Netflix, to put it on Amazon, to let people binge view,” Moonves said. “That’s our inherent right to be able to do that.”

He also decried any attempt to lobby Congress or the FCC to alter policy in order to prevent the type of blackouts CBS just experienced.

“To get the government involved is by far a really dumb thing,” he said. “That is the last thing we want to do. We are in a free market.”

Moonves may think so. The FCC might as well, having discouraged TWC from going through a formal complaint process during the CBS battle, a TWC representative said.

But distributors would love help from Washington, feeling content costs are skyrocketing and they have little power to stop it. In the meantime, CBS and brethren will continue to take their money and look to close the "Zucker Gap," which should enrich them even more.

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