NEW YORK (AdAge.com) -- While NBC Universal's top executive has proclaimed the demise of the old way of doing business in the broadcast-TV industry, CBS's top honcho is taking a different point of view.
"I would say certain people are having audience erosion and certain people aren't. We are not. The model, I know you've heard a couple of days that the model is broken. I'm here to tell you the model ain't broken. The model works. There are still hit TV shows. You can still make a lot of money in network TV; we're making a lot of money in network TV. We like 10 o'clock shows," said Leslie Moonves, CEO of CBS Corp., speaking before investors at an annual media conference held by UBS. He was referring to NBC's recent decision to move Jay Leno into a 10 p.m. slot five days a week starting next fall.
That maneuver, as well as recent comments by NBC Universal CEO Jeff Zucker, have given many reason to think that broadcast networks going forward will be less able to create scripted dramas and comedies. They have been crimped in recent months not only by a writers strike, but by ratings erosion and increased penetration of online-video viewing and digital video recorders.
Upfront commitments remain strong
Mr. Moonves is unfazed. While noting that scatter pricing is "down from a year ago and obviously volume is down as well," because of the current economic downturn, Mr. Moonves also said that advertisers were not pulling money from upfront commitments.
"The upfront commitments have maintained their strength. It has been no different than any other year. The good news is the upfront pricing was up high single digits, which is why we took a larger chunk of upfront advertising in terms of volume -- which I'm very happy we did today, where we took in nearly 80%." He also said that CBS has had "zero make-goods" and "very few cancellations or nothing that has been any different than any normal year."
The executive, did, however, peer into the future and suggest that there are multiple ways for a network to distribute content and not all of them require owned-and-operated stations and affiliates.
CBS still winning
"Once again, down the road that's something that very well could happen. But I think it's five or 10 years away before that happens. We have a number of affiliation agreements. Obviously our local stations are important to us. We do not want to bypass the importance of local broadcasters to their communities," he said. Such a move would "change the whole economic model drastically," he added.
Speaking further on NBC's Jay Leno decision, Mr. Moonves said a similar move would "not be a very good move" for CBS. "We are winning four out of the five nights at 10 o'clock. And that's an important thing to point out. Plus we own the content on four of the five nights. So not only do we make a lot of money from advertising on these 10 o'clock shows. They are great lead-ins for our local broadcasters, obviously."
He added: "Put it this way. I will bet anybody who would like to bet that 'CSI: Miami' on Monday night at 10 o'clock will beat Jay. By a lot."