Advertising is less than 50% of our business - Les Moonves, CBS

Discussion in 'TV Show Talk' started by phrelin, May 5, 2016.

  1. phrelin

    phrelin Hall Of Fame DBSTalk Club

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    It appears that CBS Chairman and CEO Les Moonves said out loud what we've known for a while now - advertisers and advertising have become far less important to media companies. From Deadline Hollywood on a panel event at the Milken Institute Global Conference held May 1 - 4, 2016, in Beverly Hills:

    According to the blurb on the Milken Institute's web site the Global Conference convenes 3500 participants who will hear 700+ speakers in more than 170 sessions over 4 days -- to explore solutions to today's most pressing challenges in financial markets, industry sectors, health, government and education.
     
  2. TomCat

    TomCat Broadcast Engineer

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    Well, not to be too obvious, but I think there is an obvious reason for that.

    Content is king, and always has been. CBS can only charge us for content it creates, or content it holds the car keys to (by selling interstitial ads). The internet has changed the paradigm of who the gatekeepers are. Nets don't own the whole pie now. 97% in the 80's, but a quickly-dwindling 40% today. Transitioning away from advertising is a smart move, sort of like Lorillard or Reynolds transitioning away from the cigarette industry in the 80's.

    What it means is that profit-wise, big nets, just like big tobacco overlords before them, have peaked. It's all downhill from here, and this is just the first stage of the long goodbye. Sure, they are doing better, but that is not due to product, industriousness, cleverness, or positioning. It's due to momentum, and pendulums always eventually swing back the other way once momentum eventually runs out.

    In other words, if you have stock in old media companies like CBS, don't wait too long to sell.
     

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