CBS Corp. topper Leslie Moonves and National Assn. of Broadcasters CEO Gordon Smith said changing technology is the main threat to broadcasting in its current form, speaking at Tuesday’s keynote event at the NAB confab.
In a keynote conversation, Smith asked Moonves what keeps him up at night. “Clearly it’s technology,” said Moonves. “Which content deal do we make? The iPad, Hulu, Netflix, et cetera, what they all need is our content. How do we get paid for this content without cannibalizing our core?
“Our bread and butter: broadcasting. It’s network television, it’s advertising number one, number two is our syndication market,” he said. “Those two revenue streams are far greater than any of these devices. They’re important, but I can’t take away from the bread and butter of those things. Our core business is network and syndication.”
Both Smith and Moonves hammered home familiar positions. Moonves repeated his call for higher retrans fees for broadcasters, noting that reruns of the “NCIS” skeins on USA Network bring more revenue than the first-run airings on CBS. “There’s something wrong with that. There’s no other business in the world where the money doesn’t follow the eyeballs,” he said.
The pair hailed the FCC’s decision to stay out of negotiations on retransmission fees, but took a wary position on the proposed voluntary spectrum auctions. “As long as it remains voluntary, we are fine with that,” said Moonves, “because we’re not going to volunteer.” Both Smith and Moonves voiced concerns the government would take action that would force stations to relinquish spectrum or relocate on the dial to less desirable channels.
Spectrum was a major theme of Smith’s State of the Industry address before Moonves took the stage. He framed broadcasting as an efficient use of spectrum because it’s one-to-many, instead of the one-to-one approach of Internet connections.
“There is not enough spectrum in the universe to replace our current architecture with a one-to-one architecture,” said Smith. He called for an independent survey by a respected third party, such as the Government Accounting Office, on how much spectrum is available and how it’s being used.
Smith repeated NAB’s position that there is no real spectrum shortage, and that wireless companies have failed to built capacity to use the spectrum they have today. He quoted one wireless company CEO saying they were sitting on spectrum because “it’s a good inflation hedge.”With his smooth baritone and bare hint of a drawl, Smith presented as every inch the GOP senator he once was, and he pitched his speech perfectly to the sparse, conservative-leaning aud at the Hilton.
He drew applause portraying broadcasting as a bedrock civic instititution. He framed apps and downloads as frivolous toys for effete urbanites (“Manhattanites searching for spas”) and broadcasting as an essential service for rural dwellers, minorities and the poor.
“They shouldn’t be forgotten so urbanites can have faster downloads for the latest games or gimmicks,” he said.
Moonves cited Smith’s leadership, as well as the emergence of important issues that required unified action by broadcasters, as an important reason CBS rejoined the NAB this year. He said he saw Smith’s State of the Industry address last year and said to a colleague “My God, Gordon is talking about all the issues that are important to us and he’s a guy I want to follow into battle.”
Moonves also said CBS had quietly struck deals with a number of affiliates to bring money retrans coin back from the affiliates to the network. “There’s no threat,” he said, noting the network has never pulled programming from an affiliate over the issue.
“Our programs are very expensive, they’re very good, we need help. What’s great is our affiliates are acknowledging that,” he said.