CBS Aims For $250 Million in Retransmission Revenue by Late 2012

The retransmission fees charged affiliates and cable systems will be coupled with a “significant” amount of reverse compensation that will start hitting CBS’ balance sheet in 2013-2014, Moonves said. CBS recently signed a 10-year retransmission deal with Comcast. But for affiliate groups that are struggling financially, CBS “won’t go after them as much” in seeking retransmission fees, Moonves said.

While major multichannel video programmers (MVPDs) have pressed the FCC to change the good-faith bargaining rule on retransmission consent deals with broadcasters, the commission “for the time-being seems to be laying back,” Moonves said. MVPDs have been critical of the industrywide practice of TV stations signing deals with other outlets in the same market to jointly negotiate retransmission terms. “We have not seen any red flags” from the FCC yet, Moonves said.

CBS also will continue to pursue streaming deals for its programming that so far have generated “hundreds of millions” in annual revenue for the network. CBS and joint venture partner Time Warner’s recent pact to provide streamed content of the CW Network to Netflix and Hulu will make a “significant dent” in CW’s forecast loss for 2011 and help it generate a profit next year, Moonves said. But while CW has a deal with Hulu, CBS isn’t likely to sign a similar pact until the video streaming service drops its requirement for exclusive content, Moonves said. Even if Hulu were to drop the exclusivity clause, “it still isn’t worth it,” Moonves told us, declining further comment: “We have to have the ability to be open to anybody that gets into the space.” A Hulu spokeswoman declined to comment.

CBS also is signing syndication deals for its programming, including Hawaii Five-O, which goes into U.S. syndication in 2013-2014 as part of a $2 million deal, Moonves said. The TV series already has more than $2 million in international sales, he said. At Showtime, CBS will increase spending on original content for a cable channel that has attracted 21 million subscribers. “Original content is much better than regenerated movies,” said Moonves, referring to Showtime’s one-time staple.

The TV network will weigh acquisitions since it’s “always looking for more content,” Moonves said. But “right now there isn’t anything out there that is attractive to me,” he said.

UBS Conference Notebook

DirecTV will launch the combo THR22-100 satellite receiver/TiVo DVR on Thursday, capping more than two years of development, TiVo CEO Thomas Rogers said at the conference. The HD-capable device, originally scheduled to ship in the first half of 2009, features access to DirecTV’s live, on-demand and pay-per-view content, can download updates via satellite, and supports remote DVR scheduling through a website, according to promotional material for the box. The TiVo service will carry a $5 monthly fee on top of the $10 charge for HD. The set-top box, which is being introduced at the same time as DirecTV’s HD34 multi-room product, lacks 3D, whole-home DVR and apps. DirecTV plans to ship the THR22-100 combo in its top 10 U.S. markets before expanding nationwide in the first half of 2012, Rogers said. DirecTV officials weren’t available for comment. DirecTV initially will market the combo to its customers that previously subscribed to TiVo, Rogers said. With the new launch, DirecTV is expected to spend heavily to market the product, but whether DirecTV will be able to restore the 2.7 million subscribers it once shared with TiVo remains to be seen, analysts said. Rogers declined to comment. The number of current DirecTV/TiVo customers is less than 1 million, analysts said. Meanwhile, Charter Communications will introduce its TiVo-equipped set-top box in Fort Worth this week and will add two other markets by year-end, Charter CEO Mike Lovett said. Charter also will offer TiVo’s iPad app. Comcast is testing its TiVo box in the San Francisco area with a goal of launching the service in first half 2012, analysts said.

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EchoStar hopes to have a distribution agreement with Dish Network by early 2012 for its newly acquired HughesNet satellite broadband service, Hughes Communications President Pradman Kaul told us. Under the pact, Dish would resell HughesNet equipment and service potentially to a base of retailers that includes Costco, RadioShack and Sears. Dish also may bundle broadband with its video service, Kaul said. But Dish also has a distribution agreement with Hughes rival Viasat for its service and modems. “My guess right now is that they will probably sell both,” Kaul said. Dish officials weren’t available for comment. Hughes, which EchoStar bought for $2 billion earlier this year, is preparing for the launch of its Jupiter satellite to 103 degrees W. in the spring, with a goal of having it in operation by late Q2, Kaul said. Using the Jupiter Ka-band satellite, HughesNet will be able to deliver up to 25 Mbps downstream and 600 kbps upstream, although the average transmissions, packages and pricing haven’t been set, Hughes officials said. With Viasat having a six-month jump with a satellite that launched in October, Hughes will initially remain competitive in transmission speeds and pricing using its Spaceway 3 satellite, Kaul said. The Spaceway 3 satellite has additional capacity for 100,000-150,000 subscribers and, combined with Jupiter, there will be room for 2.1-2.5 million, Kaul said. That’s up from a 1.5-2 million estimate last year. HughesNet had 626,000 subscribers Sept. 30. Hughes also plans to sign a contract for a Jupiter-2 satellite in 2012 with a goal of completing its construction in three-and-a-half years, Kaul said. Jupiter 2 would serve South America. Hughes also has secured a slot at 45 degrees west to provide DBS/broadband service to Brazil, although whether it will seek a partner or operate its own BBS satellite hasn’t been finalized, Kaul said.