Monday, June 30, 2008

Will The CNET Acquisition help The CBS News Brand?

(image via deadlinehollywooddaily)

We are rather fond of the CBS News brand. We grew up on the CBS News -- Sunday morning, CBS evening News -- and still get a warm feeling conjuring those memories. But are news divisions obsolete in the new digital age? David Reiff is quite critical about the quality of international new coverage that the network newscasts provide (How does one explain the complexity of Rwanda or the Bosnian War in significantly under 10 minutes?). Actually, we get our international news nowadays from the internet, online journals, the BBC, the Lehrer News Hour.

Clearly Les Moonves does not want to be the guy who killed the network news (who would?), especially one with such a glamorous reputation as the CBS brand. But there were sly hints that there may be a possibility when Moonves mentioned, tongue-in-cheek "The Naked News" in the same breath as Ed Murrow's glorious baby. Now, with the end of The Katie Coric News Experiment approaching, the question of the future of CBS is hazy. And that slice of evening network real estate could be immensely profitable, which would make the profit-intensive Sumner Redstone happy. Moonves is in a tough spot, and we feel for the big guy.

Still, Les Moonves defended the division to paidcontent, doubling down on his previous prediction that CBS Interactive will have $1 billion in revenues by 2010-2011. From Paidcontent:

"While others deal with the integration of CNET (NSDQ: CNET) Networks into CBS Interactive (NYSE: CBS), CBS CEO Leslie Moonves has to keep selling the strategy and the acquisition to his own grumbling shareholders. He told paidContent this afternoon he still believes the new CBS Interactive will have $1 billion in revenues by 2010-2011, with revenue of low-mid $600,000 this year. He also discussed buying an advertising company, the decision to step away from Weather Channel and the future of CBS News.

"..The online operations of CBS News have been hit hard by cutbacks in the past year. Now it will be included in a division with CNET—headed by a CNET exec. Moonves defended the strength of the CBS News brand overall and insisted 'it will become a stronger brand online with the acquisition.' As for the cuts, 'I don’t know honestly if you can say more has been stripped out if. It’s just the reality that the revenue there was not significant. We think it will be an asset that does grow. We think it will grow in terms of size, profitability, and yes, it will be in a much more important sector online than it has been.'

"..Moonves won’t say make growth predictions but is sticking by projections of $1billion in revenues from the combined operations by 2010-2011. 'Right now, the number is somewhere in the low-to-mid- six’s ($600,000) and we think that is clearly achievable this year .. when you combine the revenue targets for the two of them together.' As for how much of that piggyback off of TV’s programming budget: 'A lot of that is going to be involved with our normal entertainment product but a lot of it’s not going to be.'"

More here.

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