CBS 4Q15 Earnings Call Notes

Leslie Moonves

Advertising is as robust as we’ve seen in a long time

“advertising is as robust as we’ve seen in a long time. Scatter pricing is way up over last year’s upfront, a fact that will be fresh in the mind of buyers as they approach this year’s upfront in just a few months. This bodes very well for us, and we expect significant increases.”

Upfronts should improve this year as nervousness around digital has subsided

There was concern at the last upfront that the numbered, even though CPMs were up mid-single digits, volume was down, there was a little bit of nervousness. Oh, gee, is the digital revolution taking over? And as we saw, beginning in the third quarter when scatter went up in terms of — high teens, we’re talking about — and that continued into the fourth quarter, and continuing to the first quarter. So, once again, we always like to say that a guy who bought ads from CBS in October paid nearly 20% more than he would have if he would’ve bought from us in July. As this momentum continues — and, once again, tightened by the great sporting events we have, the Grammy awards, political advertising locally — but at the network, the scatter is getting better every month. So as we head into the upfront, we are fairly certain — and once again, Jo Ann Ross will kill me, so I don’t give numbers. But I think it’s going to be substantially higher than it has been before, than it has been in the past year.

Q: why is advertising up? A: There’s some noise that digital advertising doesn’t have the same ROI as broadcast

‘And I think there’s no question that there’s a bit of noise out there about digital advertising not having quite the same ROI as we do, as broadcast. And, by the way, we’re in digital advertising in a big way. In addition, you see things from programmatic, and you hear noise that maybe not everybody recorded is really a person. It’s a machine.”

It takes a lot of hits on YouTube to match NCIS

“if you want to reach a mass audience, and we’ve said this before, not knocking YouTube, but 20 million people watch NCIS. That takes a lot of hits on YouTube, except for Adele and Corden to equal what we’re able to do on an episode of NCIS, or Big Bang, or 60 minutes. So, I think it just comes down to it is still the best bang for your buck.”

Advertising usually shows weakness before a recession and we haven’t seen anything like that

“we were [indiscernible] back in ’08, we saw it coming, we saw it coming. It was there in bright, shining lights. We’re not seeing anything remotely resembling that now. And we have visibility through Q2 in terms of our advertising, which is sort of normal, if not even more aggressive than normal. So, that’s why I’m so optimistic about the upfront because when I can see advertising up through the second quarter, that will be right smack in the middle of our upfront presentation, and we are very optimistic. So we have not even seen any sign of that at all.”

Joe Ianniello

Showtime subs are 24 million

“we are also growing in the U.S., where our Showtime subs reached an all-time high at the end of 2015 of just under 24 million”

The number of content buyers is up and so are prices

“I will tell you that there are more buyers in the marketplace for hit content than there have ever been in the past. So the way we look at that is certainly from a price point perspective, it’s going to, price is going to go up. So we’re feeling really good about it. And again, I will also tell you that whenever we budget a revenue type, we’ve never in our professional career budgeted anything to go down. So I think we have high expectations for that, and it’s because of the content pipeline.”