Moonves: Hulu Deal Doesn't Hurt TV.com

Written by Steve Donohue

Friday, May 8. 2009 at 12:45 PM EDT Post a comment

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CBS Corp. (NYSE: CBS) isn't threatened by Walt Disney Co. (NYSE: DIS)'s move to join Fox Broadcasting Co. and NBC Universal on Hulu LLC , CEO Leslie Moonves told analysts on the company's first-quarter earnings call.

When asked if the addition of Disney and ABC.com content to Hulu would hurt the value of CBS Interactive's TV.com, Moonves said TV.com will perform well on its own.

"TV.com is doing extremely well. We like the ability to control our own content -- where and when it goes. We don't like the idea of being exclusive to Hulu. It's not to say one day you won't see CBS content on Hulu, or Hulu content on TV.com. But this gives us the freedom to place our content wherever we want," Moonves said on the conference call Thursday.

"We wish Hulu well. We think it will do well. But we think TV.com will do extremely well, and we will be in control of our own destiny," Moonves added.

CBS picked up TV.com in its acquisition of CNET Networks last year, and it relaunched the site, which is part of its CBS Interactive unit, in January.

Thanks to the CNET acquisition, CBS Interactive generated $134 million in revenue during the first quarter, which more than doubled its performance during the same period last year.

Total monthly unique visitors on sites owned by CBS Interactive have increased 20 percent since the CNET acquisition and recently eclipsed 200 million monthly visitors for the first time, Moonves said.

While Moonves was optimistic on Thursday's call, telling analysts that ad sales will increase during the second half of the year, the sagging economy hurt CBS during the first quarter. It reported $249.8 million in operating income before depreciation and amortization (OIBDA), down from $642 million during the first quarter of 2009. CBS revenues fell to $3.16 billion, down from $3.65 billion this time last year.

"There is no question that our local businesses, including television and radio and outdoor were hit by the recession and they have borne the brunt of this economic downturn. Fortunately, we feel that is starting to turn, and despite the operating environment we faced in the first quarter, we have confidence that the second half of '09 will be stronger than the first half," Moonves told analysts.

CBS expects to drive improved revenue and income figures during the third and fourth quarters of 2009, Moonves said. "It's premature to call it a full recovery, but the trends are encouraging, particularly as we look to the back half of the year," he added.

Other news from the earnings call included:

• CBS said home entertainment revenue rose 69 percent during the first quarter, thanks to strong DVD sales of TV series.
• Showtime, CBS's premium cable channel, grew its subscriber base to 17 million, an increase of more than 1 million from this time last year, driven by the success of original series Weeds, Dexter, Californication, and The Tudors.
• Moonves said the decision by rival NBC to remove scripted TV from the 10 p.m. hour with the launch of a new program featuring Jay Leno this fall will help CBS during the upfront sales period. "We are confident that we will take share and maintain or increase our revenue in what remains a vital and lucrative marketplace," he added.