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Moonves: Nets have little faith in Hulu

CEO reveals insights into CBS digital strategy

CBS topper Leslie Moonves reiterated that the Eye is banking on double-digit CPM growth in this year’s upfront negotiations in his remarks Thursday at a media confab in Gotham hosted by Nomura Securities.

Asked by analyst Michael Nathanson about upfront advertising negotiations, Moonves said, “we are in the dance,” adding that he expects double-digit gains in pricing. The strong scatter market “gives our sales force a lot of courage” when sitting down to negotiate. Moonves said CBS, unlike some of its competitors, is “not rebuilding (its lineup) but reloading … we are negotiating from a position of strength. We have been the No. 1 network in eight of the last nine years.”

Moonves played provocateur at the confab by asserting that he believes two of three network partners backing Hulu “would back out today if they could,” without specifying who.

Moonves said Hulu “gives away the family jewels for free” in reference to shows and “we don’t believe in it.” He added that he has no regrets being the “lone ranger” several years ago in not joining with Fox, NBCUniversal and ABC to support Hulu.

About the Eye’s digital strategy, Moonves said he doesn’t see Netflix as the “anti-Christ” but CBS will only sell programming to the service that doesn’t hurt “our content food chain,” which derives revenues from advertising, syndication and retrans fees. “We see them far more as a friend than a foe,” Moonves said, conceding Netflix’s foray into original programming makes it a competitor, too. Making hit shows “is not so easy.”

On retrans, Moonves said he expects CBS will bring in more than $1 billion in fees and reverse compensation from affiliates by 2017. As those payments rise, Moonves predicted that some fringe cable networks may fall by the wayside.

“Broadcast is a great place to be right now,” he said. Moonves noted that some cable nets with a fraction of the audience of CBS’ are getting more in fees. That will change dramatically, he vowed.

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