CBS 2Q17 Earnings Call Notes

Leslie Moonves – CBS Corp.

Yes sports bidding is becoming more competitive out there

“Mike, on the sports, yes, the competitive bidding is becoming more and more out there, and obviously there’s digital players in the sports arena. The good news is we have the NCAA tournament till 2032, so I think we’re fairly secure in the near- and far-term on that. In terms of the other rights, look, the NFL has always been extremely supportive of broadcast television. Yes, there’s going to be a digital component, and you’re right, this service could be – allow us to be a bigger player in that and perhaps get certain digital rights as these contracts come up more and more. But once again, we have proven that broadcast is better than cable, ascertained by our NCAA ratings versus some of the cable people who have the NCAA, and I think the NFL has always stated there’s a reason that the Super Bowl is always on network television. It’s just higher rated, nobody has the reach that we do. There’s no question that digital players will become more important, but we think they will go along with broadcast, not alone.”

Joseph R. Ianniello – CBS Corp.

We have Netflix envy

Laura, we have Netflix envy, and we try to present our results in a way to give you the ability to value us on an equivalent metric. So we’ll leave the valuation to you guys. We’ll post the results and you tell us what it’s worth.

CBS 1Q17 Earnings Call Notes

Leslie Moonves – CBS Corp.

Up front is going to be strong

“Yes. Alexia, and I know I sounds like a broken record every year at this time, but the upfront to me is going to be exceedingly strong. You start hearing numbers like high singles in CPM growths, and judging by – the scatter market once again remains very strong. There’s a lot of demand for our product. So we’re looking at a year where we think it’s going to be much better than last year, and we had a very solid year last year. So I know I’m Mr. Broadcast and I’m the cheerleader, but I got to tell you I’ve been right – I sound like Donald Trump – I’ve been right more than I’ve been wrong in terms of those things that are going on.

We wouldn’t mind owning more stations

“Look, these stations, the majority of their money is made by network content. It’s still the best game in town. Once again, you’re talking about a place where there is a battle over affiliates of a specific network group. We view the stations as a very profitable business. We like the business. If there is an opportunity for us to get something that makes sense for us, it is okay. But we don’t feel a need to go out and acquire a large station group. Once again, they still have to come to us for our content. We still have the NFL. We still have Big Bang Theory. We still have NCIS. We still have 60 Minutes. So as this consolidation goes on, we’re watching it with interest. We wouldn’t mind owning more stations, but only if it’s cost effective.”

CBS 4Q16 Earnings Call Notes

Leslie Moonves

NFL improved after the election

“Look, obviously, there’s been a lot of conversations about the NFL and the ratings, and clearly there was improvement after the election was over. That was one of the factors. The good news is the playoffs did extremely well for us, so we made up for that. And as we said, we had fewer games. So going into next year, we plan it – as I said before, it’s still the best content on television. I’m still happy we have our Sunday football and our Thursday night packages, and Jo Ann and her team are planning on selling it aggressively as we always do. The fact that it was down this year is not really going to affect that.”

Thanks for calling us attractive

“Look, we’ve always said we are self-contained and we are very strong and we like our position. Thank you for calling us very attractive. We feel that way too. Obviously, the wireless companies as well as the Silicon Valley companies are all looking at the content companies as being very valuable. They’re all trying to get into the content business. But we feel very secure in who we are and we’re going to continue to play the game that way.”

Scatter pricing is strong

“You know what? Our cancellations, I haven’t gotten the call from my salespeople, so this is the first I’m hearing that they’re slightly up. Maybe you’re talking to the wrong network. No. So anyway, yes, scatter is strong. Once again, it’s too early to predict pricing on the upfront, but we are anticipating another strong upfront. It’s still the best game in town and we’re – I’m optimistic.”

Cable operators are realizing they can’t do their own all original content

“It’s very interesting. You point out something very interesting in that our off-network product initially went to cable, then it went to the SVOD players, then it went to both. And I think on each show that we do, we sort of do a different analysis. And there are more players in the marketplace that are now looking for content, which is great, on the streaming services as well. So it’s really a mixed bag. I think some of the cable operators are coming back to buying off-network product. They realize they can’t do their own all-original content. So as long as we keep doing what we do, which is produce good original content that we own, we’re going to be – not only we’re not going to exploit the international marketplace, but domestically the numbers are – continue to get higher and higher every year.”

We are talking with the NFL to do things about speeding up games

“All right, Tim. I’ll answer the second question first. Obviously, we’ve met with Roger, and we’ve met with the NFL a number of times. We’re all looking at how the product can be more efficient, possibly speeding up the games, possibly things in terms of pods, possibly things in terms of the referees looking at the replays, how long that takes, et cetera. So we’re looking at some reformat ideas. Obviously, we’re not planning on cutting advertising. If there are ways of doing advertising in different ways that are equally beneficial, we’re looking at that, and we’re trying to make the game as good an experience as we could make it.”

CBS 3Q16 Earnings Call Notes

CBS (CBS) Q3 2016 Results
Leslie Moonves – CBS Corp.

Base business very healthy

“In addition to that, our base business is very healthy. Nationally, advertising is accelerating here in the fourth quarter due to the higher upfront pricing that kicked in with the new season and a very, very strong scatter market. And locally, political advertising is extraordinarily high with spending like we’ve never seen before, led by down-ballot races, leading to new records for us at CBS.”

Record year for political advertising

“In Local, the big story of course is political advertising. Despite what you may have heard from other station groups, 2016 will be a record breaking year for us in terms of political spending. In fact, our total billing for this year’s Presidential race is on track to be 74% higher than it was four years ago and while the top of the ticket may be getting more attention, it’s what’s happening at the local levels that’s really interesting.”

Let’s see what happens to football after the election

“Look, as I mentioned, primetime is down a lot across the board. Sunday night is down a lot. Monday night is down. Thursday night is down. Once again, we’re done with our Thursday night games. We have it next year. It’s half a season. We don’t want to make any decisions or any thoughts about that. As I said, we’re really happy that 95% of our games are on Sunday, and those numbers are a lot better. Plus, there are a lot of factors. It’s a little early, and obviously the election has been mentioned. Let’s see what happens a little bit down the road.”

CBS at Goldman Conference Notes

Les Moonves

More people are watching TV they are just watching it differently

“I appreciated what the gentleman from comScore said, which we wholeheartedly endorse, that more people are watching television today than were watching 15 years ago. They are just watching it in different ways. They are watching it digitally, they are watching it through DVRs and once again we are now accounting them, we are getting paid for them. So the prospects for all those things I mentioned are very good.”

Have 2m OTT subs

“OTT we hit as we mentioned 2 million subs between the two of them this year. We also said by 2020, we expect to have 8 million, 4 million apiece. I think it’s very possible that number could be larger than that. A lot of it is going to be dependent on original content, which we have coming to All Access.”

China is opening up as a real media market

“the opening of China, frankly, before two years ago we were getting nickels and dimes and we used to fondly say that The Big Bang Theory is the number one watched show in China except nobody over here got paid a nickel for it. That it was just out and about and neither Warner Bros. nor CBS got any money for it. Now that marketplace really is opening up and, obviously, it’s a very, very large market.”

Trump isn’t spending as much on ads as people may have thought

“, we have no revenue warnings here. They are probably, to generalize, there’s probably not as much of the top of the ticket because Mr. Trump doesn’t appear to be spending as much as people may have thought. But down below in terms of senatorial, gubernatorial, congressional issues we have five stations in California, five TV stations. The issue spending is tremendous.”

Investors are always nervous that’s what they do

“Investors are always nervous. That’s what they do. They are nervous.”

Categories of spending don’t matter for aggregate advertising

“There’s 99 things that could be good and then let’s talk about the one category that’s – when people ask me about categories like I hear auto is down or pharma is down, I swear to God I don’t pay that much attention to it. Because I’ve been doing this a long time and when auto is down retail is up and pharma – you know what I mean? It’s categories aren’t important. And I think from my vantage point, and we’re still about 50% advertising, the economy is doing great and we’re doing great.”

wall between linear and digital advertising is breaking down

” the wall is breaking down between linear and digital advertising and more and more people want the complete package. We’ve always said if you have a product, certain products are time constrained but that’s a very small percentage of your product. If you are buying Kraft macaroni and cheese it doesn’t matter if the people are watching the show 60 days from now it’s still the same package and still the same macaroni and cheese. At least last I saw it was.”

Basic cable re-run marketplace has come down a bit but that’s more than made up for by SVOD players

” you take most basic cable networks that are doing original, they are doing three or four hours of original programming. So it doesn’t cover a week. So they are still buying a great deal from us. And some of those shows, you turn on Turner, there’s a lot of Big Bang Theory, there is a lot of Big Bang Theory. You turn on USA, NCIS is all over the place over there. So a lot of them are still reliant on that programming. Having said that, yes, the marketplace has come down a bit but more than made up for by the SVOD services who want everything. Who you are able to make the competitiveness of the marketplace because of Netflix and Amazon and Hulu and all those people vying for it makes the backend domestically so much better than it used to be when it was just a basic cable sale.”

Twice as many scripted series today as five years ago and that makes it harder to market

“There are 500 scripted series today and five years ago there were 200. So it’s a lot tougher. 90% of our promotion for our network comes from our network. In other words, you sell to people who watch television. You do buy some outside. So that hasn’t really changed. Is it more competitive? Yes. Are the results harder to qualify? Absolutely. You shouldn’t look at overnight ratings anymore. You shouldn’t even – as I said, the backend becomes more important than the front-end. It’s hard to tell what a real hit is than before and there’s a lot of stuff out there.”

Investors are fickle

“The same and investor one month why are you buying back so much to why didn’t you buy back more. It’s very fickle. We’re going to continue with the same basic plan as we have and as I said we are going to receive some capital from the radio deal and we will use some of that for buyback and some of it to invest back in the business. ‘

CBS 2Q16 Earnings Call Notes

CBS Corporation’s (CBS) CEO Leslie Moonves on Q2 2016 Results

2m OTT subs goal of 8m by 2020

“As you recall, we set a goal of 8 million subscribers between All Access and Showtime OTT by 2020, representing $800 million in new revenue. With more than 2 million subs between them already, we are confident that this will be easily achieved.”

Joe Ianniello

We expect a great year for advertising

“We expect a great year for advertising. Year-to-date, underlying network advertising was up 7% and we anticipate a strong finish to 2016 led by our new upfront pricing as well as a strong marketplace for sports advertising that really begins with the kickoff of the NFL season in September.”

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.”

Miscellaneous Earnings Call Notes 11.5.15

Colgate-Palmolive’s (CL) CEO Ian Cook on Q3 2015 Results

Have seen a decline in private label

“At the same time, we’ve seen a decline in private label shares in many of our categories indicating the consumers preference for branded products and respect of our equities.”

Anheuser-Busch InBev’s (BUD) CEO Carlos Brito on Q3 2015 Results

Big change in the Chinese economy towards consumption

“I think what’s happening in China at this point is that there is a big change from an economy that was all lead by exports and heavy investments in fixed assets, okay that generates a lot of blue-collar work or jobs to now an economy that’s much more service and domestic oriented economy. So more consumption, more consumer spending. So that of course, in the midst of this change, we see that in the Southeast, where some years ago there was lack of blue-collar workers and now there is too many of them. So there is a shift in there and I think that’s what the segments are showing us. But the segments that are more high priced are growing ahead of the ones that are lower price. And that’s exactly where we have most of our business and most of our brands position. So I think this change, while it may be bad for the industry, is not bad for us.”

PriceSmart’s (PSMT) CEO Jose Luis Laparte on Q4 2015 Results

We do have a soft economy in Columbia right now

“We do have a little bit of a soft economy right now, driven by the devaluation and other factors in the country. But we still are pretty optimistic about Columbia, and we haven’t reduced our efforts.”

Phillips 66’s (PSX) CEO Greg Garland on Q3 2015 Results

We see that the consumer side of China is doing very well

“we’re continuing to see good demand in Asia and across the system globally. So I think our view is demand is good. China is particular interest I think largely because of the reported numbers that what we see on both fuels and chemicals tells us that the consumer side of China is doing very well.””

By 2017/18 we’d expect not to be in a $50 crude environment any longer

“I mean our view consistently remains by 2017 and 2018 that really sort itself out and we are probably not $50 crude environment but we are probably not $100 but somewhere $60, $70, $80 in that range.”

Greenlight Capital Re’ (GLRE) CEO Bart Hedges on Q3 2015 Results

-16.9% through October

“The Greenlight Re investment portfolio lost 14.2% in the third quarter, bringing the year-to-date return to minus 16.9%.”

Brought next exposure up slightly during market sell off in August

“We reduced our gross exposure by 30 points in the quarter. Our net exposure increased slightly from 21% to 26% as we covered several shorts during the market sell-off in August. We continue to hold macro positions including gold, short Asian currencies and short French sovereign bonds. Overall, it’s been a challenging environment. We’re optimistic that we should get some recovery from our beaten down long portfolio.”

The Sherwin-Williams Company’s (SHW) CEO Chris Connor on Q3 2015 Results

Volume demand lagged initial expectations in virtually ever market we serve

“Volume demand lagged our initial expectations for the quarter in virtually every market we serve, but we remain focused on delivering positive results regardless of the demand environment.”

Continue to see deteriorating demand outside of NA

“We continue to see deteriorating demand for our product outside of North America.”

Banco Santander-Chile (BSAC) Q3 2015 Results

Economy has done better than most regional peers

“Segment [ph] in the corporate sectors continue to contract, but given the diversity of Chile’s economy and the fact that the average GDP growth of Chile’s main trading partners is relatively high, the economy has done better than other regional peers.”

No deterioration in asset quality

“In terms of evolution of asset quality, we think that the aligned trends are generally positive, especially in the consumer side, in the mortgage side and in the mid-size market. We haven’t seen any deterioration. ”

CBS (CBS) Leslie Moonves on Q3 2015 Results

Advertising is coming back in a big way

“advertising is coming back in a big way at CBS. Underlying network advertising was up 8% in the third quarter with strong growth in primetime, double-digit growth in sports and daytime and huge growth in late night, which was up 42%.’

The dire predictions of cord-cutting are overblown

“I think we’re all seeing that the dire predictions of cord-cutting are overblown, but the good news for CBS is, no matter where distribution goes, no matter how or where you want your content, we are in a perfect position. ”

There can never be too much content

“we are a content company, we believe the world can have more content, we don’t believe the guy who says oh, there’s too much content. There never can be too much content and we want more of it.”

Activision Blizzard (ATVI) Robert A. Kotick on Q3 2015 Results

Comparing King to Blizzard

“When we merged with Blizzard Entertainment, we found the right partner with extraordinary leadership. And when others dismissed the sustainability of Blizzard’s incredible capacity for innovation, we were certain patience would be rewarded. And it has. We see a lot of the same characteristics today in King. We think now is the right time to enter mobile gaming in a meaningful way. ”

Third Point Reinsurance’s (TPRE) CEO John Berger on Q3 2015 Results

Third Point owns Argentine debt

“Sovereign credit was up 3.1% on average exposure during the quarter, due to strength in Argentinean government debt the largest position in our credit portfolio. We’re looking forward to the run off Argentinean presidential election next month and we’ll be pleased with the victory from either candidate.’

Michael Kors Holdings (KORS) John D. Idol on Q2 2016 Results

Warm weather bad for seasonal items. Watch business still under pressure

“We saw accelerated growth in footwear, although the warm weather tempered boot sales in the quarter. The watch business continues to remain under pressure in retail and wholesale. ‘

Trend has been towards smaller handbags

” the idea that people are not buying handbags, I do not believe is a correct concept. They happen to be the fashion trend of smaller bags, so if we were selling x percent of $350, $400 and $500 handbags at this time last year we were selling less of those because we were selling a lot more in particular across bodies and large wallets. And that is what the consumer in particular the millennial is viewing as a fashion trend.’

All of us are now being impacted in parts of Texas because of oil prices

“all of us are now being impacted in parts of Texas because of oil prices there, that’s a little bit less tourist, but some of it’s related to the Mexicans shopping cross-border with the peso to the dollar.”

Time Warner (TWX) Jeff L. Bewkes on Q3 2015 Results

Programming is the most significant area of investment for the company

“Programming remains by far the most significant area of investment for the company. As you all know, we have plans to invest aggressively in content in 2016 and beyond.’

Stratasys (SSYS) David Reis on Q3 2015 Results

Excess capacity created by extraordinary expansion in 2014

“We also believe the situation has been worsened by the negative impact of excess capacity that followed the two-year period of extraordinary industry expansion that ended in 2014. Reflecting the low visibility of the current market environment, expected orders did not materialize as expected at the end of the quarter.’

Focused on adjusting the cost structure of the company to fit customer demand

“what I can tell is that we are taking very seriously the change in the business volume that we see in front of us and we are dealing with adjusting the cost structure of the company, the entire cost structure of the company not only MakerBot, to fit through what we see today in the market in terms of customer demand.”

Douglas Emmett’s (DEI) CEO Jordan Kaplan on Q3 2015 Results

Seems like occupancy is being driven by much stronger tenants

“I would say that, what’s driving — what’s going on here right now is a much stronger and wider base than what was driving the run up in ’04, ’05, ’06 and ’07. It’s way more comfortable, a way better percentage of kind of expenses for the tenants. The tenants are very — we’re seeing strong balance sheet and good credit. We’re seeing a good diversity of industries. You’re not seeing like a heavy lean on, I remember before, it was the mortgage — these mortgage guys were taking huge chunks of space”

“the strength in this market, all seems really healthy going to just literally more functional space for our tenants, as opposed to some of the tenants before that were literally just space grabbing and whether it be a big dotcom guy that didn’t exist a year ago and all of a sudden now needs 50,000 feet, 100,000 feet. What’s going on now seems a lot more comfortable and it’s backed by much stronger, more established tenants.”

Annaly Capital Management’s (NLY) CEO Kevin Keyes on Q3 2015 Results

Continued improvement in CRE fundamentals in the US

“The third quarter saw continued improved in U.S. commercial real estate fundamentals with healthy demand across all property types. Vacancy rates across all asset types declined compared to last quarter, with office and industrial continuing a trend of 22 consecutive quarters of positive demand.”

While the pace of CRE asset sales has slowed, we don’t see this as a weakening trend

“While the pace of sales has more recently begun to slow down 10% in September, we don’t see this as a weakening trend, as large take-private transactions continue to be announced with private equity taking advantage of the discount between listed markets and asset values.”

CMBS spreads have moved wider, but cap rates have not yet moved higher

“Spreads, however, have a continued widening that started this summer, with AAAs now at about 120 basis points, 32 basis points wider than at the beginning of the year and 34 basis points wider than this time last year. In addition, BBBs are almost 200 basis points wider than this time last year. While, this type of rate expansion is significant, we have not yet seen cap rates move higher. ”

CBS 2Q15 Earnings Call Notes

Must position for broadband future with potential audience of 90m households

“The heart of our strategy is to create must-have content and position ourselves for the broadband future. During the quarter, we took significant steps forward in this regard. First, we launched the new streaming service for Showtime. This will enable us to gain subscriptions from a potential new audience of as many as 90 million households. Next, we greatly expanded the reach of CBS All Access, our over-the-top subscription service.”

We have the most watched programming and we will get paid for it

“out of every network on television, broadcast or cable, and every site on the Internet, we have the most watched programming there is anywhere, and we will get paid the appropriate amount for it.”

There are all sorts of places that we can sell our content around the world

“As the major U.S.-based SVoD companies expand aggressively overseas, local assets with their own SVoD services are now stepping up to compete. So there are all sorts of new places where we can sell our content around the world. As a result, we continue to post rapid and sustainable growth in international license fees.”

90m homes will now have access to Showtime directly

“As I said earlier, there are about 90 million households in the U.S. that will now have the ability to add Showtime directly for the first time. This includes broadband-only homes and homes that previously could only purchase Showtime after buying basic cable packages. Capturing just a small percentage of these subscribers will begin to pay off immediately and will lead to a tremendous upside for us.”

Politico estimates that next year campaigns will spend $4B on TV advertising

“POLITICO estimated last week that TV ad spending, TV ad spending for the 2016 campaign will top $4.4 billion. That’s $0.5 billion up from 2012 and four times as much as campaigns are expected to spend on digital.”

Ad buying has been strong

” it’s definitely demand across the board. Obviously, we have inventory, because, you know, that’s why you don’t sell out 100% of the Upfront because again, you want to have that scatter available, and we’re taking advantage of it. As Les said, the price increases are double digits. If I was just looking at a couple of categories, auto and healthcare are two categories that are really spending here in the scatter.”

We can just keep investing in programming and there are so many possibilities

“in terms of programming, what’s changed about the marketplace is, and we’ve mentioned it, is that the back end is becoming as important as the front end. So investing in more original programming for both CBS and Showtime offers so many more possibilities, which is why that we have increased the number of originals we have on CBS, and we are also increasing what’s available on Showtime, because we are able to monetize it. Every time we order a new show, we have an entire game plan, so there is very little risk, and the upside is pretty tremendous”

Floyd Mayweather did better than CBS on the fight

“Well, on this fight, Floyd Mayweather did better than CBS did. That’s all I got to say…We made a sizable amount of money. As I said, not nearly what Floyd or Manny made, but we did fine.”

Skinny bundles are good for us because it drives prices more towards parity per viewer

“every skinny bundle deal that’s out there, and obviously we’ve made a few of them already, the ecosystem gets validated towards he who has the most viewers gets paid the most money. I know it’s an odd concept for some of the cable companies, but that’s the way it should be. We’re sort of re-regulating what the system should be. So anytime there’s a new bundle that you hear out there, you can assume that CBS is applauding it, because we are going to get paid more than we get paid by the traditional MVPDs.”

We love having the super bowl

“if there’s a rap on it, tell them we will take the Super Bowl every single year, year in, year out forever. So, you know what, if the incremental doesn’t outweigh the amount of money you get per spot, what NBC got last year, it is very, very worth it. You are going to see it in revenue and in profit in 2016 and we love having it. We’re very excited about having it. There’s no downside.”

Broadcast will fare better than cable in digital transition

“as I said in my thesis, which I think has been borne out, is that broadcast reaches a mass audience, and there are certain niche cable networks that are replaced by the Internet.’

You wont see major brand advertisers veering away from broadcast

“You won’t see in a major car company or a Procter & Gamble; most industries will not veer away from broadcast. Digital obviously is the brave new world, and we’re part of it, but most digital advertising is actually off network product that you find digitally.”

CBS 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Spun off outdoor business

“we successfully completed the separation of our Outdoor business. This accentuates that CBS is a content company, and we are fully focused on what we do best.”

Thursday night football going to be on CBS

“the CBS Television Network will have the biggest event on television this fall with Thursday Night Football. Never before in the history of network television has the NFL been on Thursday nights.”

Back end as important as the front-end. Content is king

“one of the things that clearly has changed about our business is that the back end of a show’s revenue is now as important, if not more important, than the front end from advertising. Ownership of content is the key to our success. So we’re very pleased to have increased the number of shows that we own on our prime time schedule. We will have ownership in 4 out of 5 of our new series on CBS this fall and in more than 70% of our total lineup.”

CBS Studios producing more content

“in order to grow our portfolio of owned content franchises, CBS Studios is going well beyond the CBS Television Network. We’re programming for Showtime, for the CW, for other cable networks and for other broadcast networks, including a straight to series order for ABC.”

Everybody is doing original content

“I know people are doing more original programming, but the big hits are still selling very well in off-net. ”

Price of licensing SVOD going way up because of Netflix and Amazon

“One of the things that has changed obviously is the great expansion internationally of both Netflix and Amazon. So it becomes a much more competitive marketplace in just about every one of the international territories. So you’re seeing huge international numbers, bigger than I’ve ever seen before. When you announce a new fall show that’s a drama, the numbers are truly extraordinary with rarely a number being below $2 million per episode for a brand-new drama and north of $3 million for some of the more established hits. So that’s fairly substantial. ”

It’s easy to make SVOD deals

“In terms of the SVOD marketplace, once again, we are able to make deals consistently. As we said, we’ve expanded our Netflix library. We are extremely pleased that our current 2 summer shows have deals with Amazon and the next year show has a deal with Netflix.”

Content wins

“at the end of the day, it’s all about content. And clearly, we’re heading towards the universe where people are going to watch it when they want it, how they want it. As long as they’re counted, as long as we keep being sort of dominant in being the premier supplier of network programming, we’re always going to win, we’re always going to be fine monetarily. So we’re very excited about the future. We’re very excited how technology is changing what we’re doing. But it still depends on if — people won’t watch bad shows on good devices. It still depends on having a good show.”

Repeats aren’t drawing viewers

“there’s no question, the repeats aren’t doing quite as well as they used to. So we are definitely trying to pack in our schedule with as many original programming.”