CBS executives predicted the company would fare well in the coming “upfront” market, when U.S. TV networks try to sell the bulk of their advertising.
“We are salivating as we head into the upfront season,” said Leslie Moonves, chairman and chief executive of CBS Corp. during a conference call with investors. Moonves cited new scrutiny being placed on digital media by advertisers, who are frustrated by measurement as well as fraudulent reports of traffic activity. “There is a shift of dollars coming back into television.” Moonves suggested the broadcast networks could see more than a 9% increase in volume of ad commitments placed in advance.
He also predicted that CBS would notch a “nice” CPM increase, or positive change in the rate charged to reach 1,000 viewers, a common measure in these annual discussions between advertisers and TV networks.
Media executives are showing new confidence in the TV-advertising market, which has slumped for the last several years. For several weeks now, media companies have disclosed robust markets for so-called “scatter” advertising, or commercials bought closer to the time they air. When scatter is on the rise, advertisers tend to invest more heavily during the upfront, in hopes of locking in ad costs they believe will rise later in the year.
“‘The scatter market is as hot as it’s been in many, many years,” Moonves said.
And he expressed confidence the network would be able to secure double-digit CPM increases, even as ad buyers have balked at the notion of paying those rates. Moonves is known to make outsize predictions during public remarks, and his comments may simply represent a way of sparking negotiations with Madison Avenue.
In other tidbits from the earnings call:
*Moonves committed to a January premiere for the new “Star Trek” incarnation coming to CBS All Access. And he said episodes would roll out weekly on the streaming platform rather than the all-at-once approach taken by Netflix and Amazon.
*Moonves emphasized CBS’ drive to own all or part of the programs on its air. Of the 16 drama pilots now vying for a shot on CBS’ 2016-17 schedule, the Eye owns or co-produces 15 of them. With few holes in the schedule, Moonves said the 2016-2017 CBS schedule would cost less than the current one.
*Showtime’s broadband-only streaming service is starting to become a “meaningful contributor” to the profits of CBS’ cable business.
*Showtime OTT and CBS All Access are on track to deliver the $800 million in incremental revenue over the next five years that CBS promised investors back in February.
*Moonves wouldn’t touch rumors that CBS is exploring ways to collapse the dual-class stock structure that has allowed Sumner Redstone to maintain an iron grip on CBS and Viacom.
