CBS chief executive Leslie Moonves told analysts Thursday that the company was pitched by Apple to join Apple TV, and turned it down based on the lack of an upfront commitment.
Moonves told analysts that in less than eight months, the network has secured deals that are worth hundreds of millions of dollars, including distribution with Amazon, Hulu, and others. But that apparently won’t include Apple TV, where rumors of a subscription service to match Hulu and Netflix have bubbled up for months.
The reason? According to Moonves, the lack of an up-front cash payment. Instead, Apple wanted to negotiate an ad-based split. That may speak to the lack of advertisers on networks like Hulu, or emerging ones like the Apple TV platform— the set-top box, not the actual TV set that Steve Jobs reportedly championed.
Moonves, for his part, noted that the company’s syndication business (not streaming) generates $1 billion per year, led by CSI and NCIS, and that CBS currently has 20 out of the top 30 shows on TV.
Here’s the question and answer, as archived by Seeking Alpha:
John Janedis, UBS Investment Bank:Â “Guys, just going back to streaming. I think for the most part, the deals you’ve written have been guaranteed or upfront payment. So I’m wondering, looking ahead, I think the newer players that are going to be out there are going to have a harder time aggregating to subscribers. So can you talk about your appetite for deals that are success-based or non-guaranteed?”
Leslie Moonves: “We—frankly, we don’t believe in them. We’re not going to go out and we’ve sort of—we’ve even been against joining Apple TV, which was an advertiser split. And these deals are significant in that we are getting guaranteed cash payment. We like operating on that basis. And as you said, we’ve been able to do deals worth hundreds and hundreds of millions of dollars on that basis. That is our position right now. Will we ever make a statement that, that never could happen? I wouldn’t right now because we don’t know how the world evolves, but I like the way we played our hand and getting this guaranteed revenue stream is a good way to go.”
Apple said last December that it expects sales of its new Apple TV to top 1 million by year’s end. The company offered few additional details then, except to say that iTunes users are now renting and purchasing over 400,000 TV episodes and more than 150,000 movies per day. It did not break out how many of those rentals or purchases were for Apple TV.
The smaller $99 Apple TV launched last September is a quarter of the size of previous versions and includes streaming movies from Netflix and 99-cent TV rentals from ABC and Fox. To date, however, Apple still has yet to offer its own subscription service.
[pcmag]
