CBS' Scatter TV Sales Remain Strong

CBS does not anticipate any softening of the national TV advertising market -- including the scatter TV market.

Responding to a question on CNBC on Thursday about the possible slowdown in TV advertising this year, Les Moonves, chairman/CEO of CBS Corp. said: “Not true. Not seeing it at all.”

A report from Interpublic Group’s Magna unit in June noted a “softening of scatter pricing” occurring, with "weak demand" from big spenders in categories such as automotive, food and beverage and pharmaceuticals.

Overall, Magna says TV in the U.S. will witness flat overall advertising revenues through the next five years.

Moonves noted that the big scatter revenue deals for this year are yet to come. “We’re about to begin the season. We just came off an extremely strong upfront -- CPMs [cost per thousand viewers were up, volume was up -- by the way -- up across the board for all networks, even networks that were down [in viewership] considerably were up.”



“Scatter is not going to come into play for a little while," and the network isn't seeing "any weaknesses,” he added.

Moonves noted that Nielsen's ability to capture delayed viewing has bolstered its outlook. “They are getting better and better... We need them to measure delayed viewing, which becomes a bigger and bigger piece of the pie.”

He said CBS’ exposure to the up-and-down whims of the advertising market have been minimized -- now down to 45% of its revenues versus 70% 10 years ago.

This is partly due to high growth in retransmission/carriage fees, revenue from new OTT platforms and money from traditional TV content deals made with international networks/providers.

At a Goldman Sachs media conference held earlier that day, Moonves said CBS now gets around $2 a subscriber from traditional pay TV providers. CBS sees around $4 a subscriber from new skinny OTT digital services, and $6 a subscriber from its own CBS All Access.  

Projections are CBS could pull in $2.7 billion annually from retransmission, reverse compensation and skinny TV bundles fees by 2020.

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