After a long period of being somewhat cynical and wary of the appeal of Netflix, CBS Corporation’s boss Les Moonves has become a believer, talking on an investor call about the strength of the relationship between the two companies and describing the renewal of the contract between the two as being “preordained.” What turned him around to such an extent? Possibly the revenue boost that the partnership has given CBS when it most needed it.
Despite a drop in advertising revenue throughout the second quarter of 2012 – Ad dollars dropped 3 percent for the period, to $2.1 million, something that Moonves puts down to the Olympics making competitor NBC a more attractive proposition currently – CBS’ overall revenue for the quarter was up 8 percent. Coincidentally – or not, as the case may be – that’s the same percentage of gain that CBS’ affiliate and subscription fees show for the second quarter, a department that includes digital distribution, such as the Netflix deal.
On the call, Moonves talked about the success of the partnership, saying that one of the successes in terms of viewership on Netflix was Star Trek – Presumably the entire franchise, which includes not only the original series, but spin-offs Star Trek: The Next Generation, Star Trek: Deep Space Nine, Star Trek: Voyager and the prequel Star Trek: Enterprise. That shouldn’t exactly come as a surprise; the franchise has long been a fan favorite, but only available via expensive box-sets, deterring a casual viewership who can now, suddenly, access the show through Netflix Watch Instantly. I know a number of people who’ve started watching series “casually,” only to end up obsessively working their way through several seasons; CBS must be happy to be creating these accidental new fans without having to actually do anything, I’m sure.
(Moonves also said on the call that CBS’ “relationship [with Netflix] is so good that we will be adding titles including CSI: Miami.” That Star Trek went to Netflix wasn’t a big risk for the company; it wasn’t, after all, making new Trek and had arguably exhausted the earning potential of that franchise outside of the special edition remastered versions now being released. Pushing the ongoing CSI franchise to the platform, however, looks like a growth of trust between the two companies, and may be a sign of the network’s material being shared on a more contemporary basis, perhaps similar to the arrangement between Netflix and the part-CBS-owned CW network, which shares previous seasons of current shows with Netflix.)
Talking about plans to expand the relationship with Netflix, Moonves reportedly promised that CBS would “get more money for this and we will have better visibility onto which shows will go into those packages.” The current agreement between the two companies lasts through February 2014.