CBS Gets Ready to Vie With ESPN in Digital

CBS Corp. intends to launch a streaming-video sports outlet that will be more newsy and less focused on commentary programs, the company’s top executive said Thursday, while taking pains to demonstrate CBS’ business acumen compared to that of rivals like Walt Disney, Comcast, Netflix and 21st Century Fox.

“I’m turning on ESPN a lot and seeing people shouting at each other. I want to see the scores,” said Leslie Moonves, chairman and CEO of CBS, during an investor conference organized by Goldman Sachs. “On our sports network you won’t have to wait for news.” CBS unveiled its plans to launch the sports outlet a few weeks ago, but the remarks represented the company’s first description of what it intends to build. Moonves said the over-the-top sports outlet would rely on advertising support initially, but suggested the company could also seek to package it in its “CBS All Access” subscription-video service. He said CBS did not anticipate any issue with securing rights from various sports leagues for the new project.

Moonves used the opportunity to compare his company’s prospects compared to those of rivals — and tout the continuing appeal of broadcast television at a time when audiences are migrating to niche viewing behaviors related to streaming video at times of their own choosing. He suggested that 21st Century Fox’s Fox broadcasting network was grappling with business issues, citing remarks made Wednesday by that company’s executive chairman, Lachlan Murdoch, who did not include the outlet as one of a passel of “core brands” his company operated. “I heard him say the network was not a core asset. We don’t feel that way,” said Moonves. “We make a lot of money. I guess maybe they are not.” He also cast doubt on Netflix’s efforts to ramp up production, suggesting top producers like Chuck Lorre would not reap the financial rewards from a Netflix series that they would from a show on broadcast TV.

To be sure, ESPN has persevered despite an onslaught of would-be rivals, including rival TV networks like Fox Sports 1 and NBCSN. And the gap between ESPN and CBS in terms of digital business is vast. According to data from comScore, ESPN lured 110.3 million users in July, who spent 5.1 billion minutes interacting with content. Digital users of CBS Sports, however, came to 41.5 million during the month, and spent 660 million minutes.

Moonves made his remarks as the Disney-owned outlet has come under significant scrutiny in recent months, suffering subscriber defections and talent layoffs. And it has been taking punches from cultural critics, who flay management response to some of the social-media outbursts made by its many hosts and personalities.

The new sports venue would be the latest of several new-media outposts CBS has built in recent years. Rather than acquiring outside digital businesses or cable networks, the company has relied on a strategy in recent years that often calls for building from within, using the properties on its flagship broadcast outlet for ballast. Its CBSN streaming-news property, for example, uses efforts by CBS News.

The CBS chief said he expected his company to ride out the current chaos of the media industry, despite eroding viewership. “When ESPN announces that they are losing subs, or Comcast announces they are losing subs, that’s a good thing for CBS. These cord-cutters, they are not disappearing,” he noted. “They don’t cut their cords and go into the woods and avoid television. They are just going to other services.” He said CBS’ presence among consumers meant its programming would be desirable no matter how it is distributed, and that CBS expected to be paid $4 per subscriber per month on various “skinny bundle” packages.

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