CBS head sees opportunity in global marketplace

Do not count Leslie Moonves among the media-titan CEOs who toss and turn at night fretting about the future of the traditional television business.

For sure, television is an industry in transition, and nowhere is that upheaval being felt more than in CBS Corp.’s core broadcast network, station and production businesses.

But from Moonves’ glass-half-full perspective, the entry of so many new-media players is less a competitive threat and more a way for CBS to make money on its proprietary content.

To illustrate, Moonves, who will be honored as Mipcom’s 2007 Personality of the Year on Oct. 9, points to the Eye’s global success with the “CSI” franchise.

“Ten years ago, if we’d had that show, (CBS) would have been paid one way for it: through advertising on the network,” Moonves says. “Now we’re getting paid 12 ways for it.”

Indeed, a dozen years ago, the federal “fin-syn” regulations barring networks from producing and owning most of their primetime shows were just being repealed. There were certainly no iTunes, no YouTubes, no Yahoos or MSNs or mobile-content providers eagerly vying for partnership arrangements with the Tiffany net’s hot properties, no DVRs and iPods to allow viewers the luxury of time-shifting their viewing.

But therein lies the rub that makes the new world order a whole lot like the old world order.

No matter how it’s consumed, no matter what form it takes, entertainment was, is and always will be a hit-driven business, in Moonves’ view.

“A bad show doesn’t get any better on a two-inch cell phone screen,” Moonves says. “People are coming to these new sources and places to watch the hits.”

As such, CBS’ primary mandate has not changed much in the era of digital downloads and an increasingly global tilt to the media biz. It all starts with the material, Moonves says.

“The international television sales business is a very big part of our business, and it is thriving,” he says. “There are more channels out there, and the quality of American dramas has never been better.”

The expansion of the television market, at home and abroad, during the past decade has been nothing but a plus for the industry’s old guard. International program sales are “the lifeblood,” he says, for studios looking to produce high-end primetime fare.

This year at Mipcom, the CBS Paramount Intl. Television sales force, led by prexy Armando Nunez Jr., is particularly invigorated because it will soon be handling worldwide sales of “CSI,” “CSI: Miami” and “CSI: NY” following the sale of the Eye’s former partner on the series, Canuck distrib Alliance Atlantis.

Moreover, the U.S. television biz has benefited from a much-needed infusion of new creative thinking, as international program sales and format licensing have become much more of a two-way street.

“I think we were a little backward in our thinking,” Moonves observes. “Look at how (U.S. networks) have gained by taking shows like ‘Survivor’ or ‘The Office.’ We no longer just think about selling our product overseas, and that has been good for the business.”

CBS Corp. has successfully sold international formats of unscripted hits, notably the CW’s “America’s Next Top Model.” But CBS is also taking a hard look at expanding into the indigenous production business overseas, as Sony Pictures Entertainment and other majors have.

Moonves sees it as a way of “amplifying” CBS Corp.’s domestic production activities and helping the Eye scout budding creative talent in far-flung locales.

Programming isn’t CBS’ only international interest. The company ranks as the third-largest outdoor advertising firm in the world, with substantial operations in the U.K. (where CBS controls the advertising in London’s Underground subway system), Germany, France and other parts of Europe and South America, as well as budding operations in China (where it has the contract with Beijing’s major bus system).

On the digital front, CBS this year scooped up London-based LastFM, a music-centric social networking service whose technology has great potential for being adapted to sites built around the Eye’s news, sports and entertainment content.

CBS also has just tapped former Columbia Pictures exec Amy Baer to head a film production unit that Moonves envisions will eventually yield four to six pics per year with budgets in the neighborhood of $20 million-$50 million. One of the big incentives for doing so was the fact that CBS already has the infrastructure to maximize the value of films it produces through its Showtime pay cabler and through foreign TV licensing.

All told, the hive of activity at CBS Corp. these days, buoyed by a strong stock perf during the past year and even stronger balance sheet, belies the conventional wisdom that the Eye would be a slow-growth stock when it completed its corporate split-off from the MTV Networks/Paramount Pictures side of the Viacom playground in January 2006.

Moonves can’t conceal his glee at how CBS Corp.’s numbers defied the naysayers and stand in sharp contrast to the struggles of its former sib. In fact, CBS Corp. is doing so well that it raises the question of whether the Eye’s logo may be looking like a takeover target to larger media concerns.

Not a chance, Moonves says, flashing his 1,000-watt smile. And the reason for his confidence can be summed up in two words: Sumner Redstone. The CBS Corp. chairman controls 73% of the company’s voting stock.

“Sumner’s not usually been a seller. He’s a buyer,” Moonves says. “We like how we’re doing.”

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