George Cheeks Named New CBS Chief Executive, Replacing Joe Ianniello

As expected, ViacomCBS Jan. 31 announced that George Cheeks has been appointed president and CEO of CBS Entertainment Group, effective March 23, 2020. He succeeds Joe Ianniello, chairman and CEO of CBS, who will be leaving the company. Ianniello will work with the company to ensure a smooth transition.

George Cheeks

Cheeks joins ViacomCBS from NBCUniversal, where he most recently served as vice chairman, NBCUniversal Content Studios. In his new role, Cheeks will lead CBS-branded assets, including CBS Television Network, which encompasses CBS Entertainment, CBS News and CBS Sports, CBS Television Studios and CBS Television Stations and CBS’ first-run syndication business. He will also partner with the ViacomCBS digital organization on the CBS-branded digital assets, including CBS All Access. Cheeks will report to Bob Bakish, president and CEO of ViacomCBS.

“Throughout his career, George has built broad experience in broadcast and studio operations and brings a unique mix of skills – combining deep commercial expertise and industry relationships with strong creative and programming capabilities,” Bakish said in a statement. “With his finger on the pulse of culture and change and his strong grasp of strategy, brands, audiences and content monetization, George will help CBS build on its position as the most-watched broadcast network and drive results across the entire CBS portfolio.”

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Bakish praised Ianniello for his 22 years at CBS, which included stints as COO and negotiating the minefield following the ouster of previous CEO Les Moonves for inappropriate workplace behavior.

Joe Ianniello

“Thanks in no small part to his efforts, the CBS brand has a strong and loyal following across a variety of platforms – positioning it well for this important next chapter. The board and I wish Joe every success in his future endeavors,” Bakish said.

Ianniello doesn’t leave empty handed. The executive reportedly got a $100 million severance following the merger between CBS and Viacom. He got millions more as acting CEO of CBS Entertainment Group.

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“Throughout my 22-year tenure I have always said that the quality and integrity of the people of CBS are what make it great,” said Ianniello. “We have extraordinary employees at all levels of this organization, and I couldn’t be prouder of how they do their jobs day in and day out. Working with Bob, I now look forward to ensuring a smooth transition to the next phase of leadership of CBS, so that the Eye can continue to thrive, just as it has for so long.”

During his time as acting CEO, Ianniello successfully grew CBS into a global multiplatform premium content company. Prior to that as COO since 2013, he was responsible for establishing and executing company strategy across all businesses. In addition, Ianniello developed and spearheaded the company’s monetization strategy across platforms, including retransmission consent fees and reverse compensation from local television station affiliates, as well as the licensing of the CBS Corporation content around the world for digital streaming and broadband services.

He also oversaw the launch of CBS All Access, CBS’ digital subscription video on-demand and live streaming service, as well as Showtime’s “over-the-top” streaming service. He led CBS’  acquisition of Network 10 in Australia and the split-off of CBS Radio through a merger with Entercom. In addition, he led the conversion of CBS Outdoor into a real-estate investment trust, marking a first for an outdoor advertising business.

As Vice Chairman, NBCUniversal Content Studios, Cheeks helped run NBCUniversal’s television studios. Previously, he served as Co-Chairman of NBC Entertainment, where he was jointly responsible for the network’s primetime, late night and scripted daytime programming – including business affairs, marketing, communications, scheduling, West Coast research and digital operations and first-run syndication.

Prior to joining NBC in 2012, Cheeks served as EVP, Business Affairs and General Counsel for Viacom Music and Entertainment Group, while also serving as Head of Standards and Practices for Viacom Media. Before that, he served in legal roles at Nickelodeon, MTV, CMT and LOGO.

 

CBS All Access, Showtime OTT Top 16 Million Combined Subs

When CBS launched subscription streaming services CBS All Access ($5.99) and Showtime OTT ($10.99), it projected 16 million standalone subscribers by 2022.

Now that tally has been reached through the third quarter of the current fiscal year, ended Sept. 30 — via some creative accounting.

Speaking on the Nov. 12 fiscal call, acting CEO Joe Ianniello was asked about the the 4% uptick in combined services’ subscriber counts and how that related to company SVOD projections.

Ianniello, who is reportedly set to receive a $100 million severance following consummation of the Viacom/CBS merger while reporting to new corporate CEO Bob Bakish as CEO of CBS, said he calculated the 4% increase by combining traditional pay-TV subs accessing Showtime and All Access as well as standalone direct-to-consumer and online TV subs streaming programming through third-party platforms such as Sling TV and AT&T TV Now.

“We think [the overal sub count] is important because there is a lot of headwind in the traditional [pay-TV] business and our point is, when you factor all of that in, we are [actually] growing subs,” he said. “And so, because obviously, the direct-to-consumer will be growing, but if you are losing [subs] in a traditional business, it’s offsetting.

“So, that’s why we thought that [16 million] statistic was meaningful …  that consumers are seeking out our content on other platforms, which bodes well for our future.”

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In addtion to live sports programming through local affiliates, All Access will begin streaming UEFA Champions League soccer, including UEFA Europa League and newly created UEFA European Conference League, which begins annual play in 2021 featuring eligible European football clubs.

“Soccer fans know these rights represent some of the most prestigious and popular soccer tournaments in the world that we couldn’t be more pleased that we won this hotly contested process,” Ianniello said. “We are currently finalizing contracts for this multi-year deal and we will be releasing more details in the coming weeks.”

CBS Ups All Access, Showtime OTT Revenue 39%

Over-the-top video distribution is beginning to generate real money for CBS. The media company now re-merged with former corporate parent Viacom, Nov. 12 said third-quarter (ended Sept. 30) revenue from OTT ventures CBS All Access and Showtime OTT increased 39% compared to the previous-year period.

Indeed, retransmission compensation, reverse comp and virtual MVPD revenue grew 18%, and total affiliate and subscription fees grew 12%, representing more than a third of CBS’ overall revenue in Q3.

Entertainment revenue increased 4% to $2.29 billion from $2.19 billion last year. The growth was led by affiliate and subscription fee revenue, which were up 22%, driven by increases in station affiliation fees and revenue from online TV, as well as subscriber growth at CBS All Access.

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Content licensing and distribution revenue increased 7%, mainly from higher sales of series produced for third parties. Advertising revenue decreased 5% from the third quarter of 2018, primarily as a result of the timing of the broadcast of sporting events and lower revenue during the CBS’ 19-day carriage dispute with AT&T/DirecTV.

Entertainment operating income declined nearly 22% to $302 million compared with $384 million in the prior-year period. The decrease was driven by an increased investment in content, including a higher number of series produced for multiple platforms, as well as the company’s direct-to-consumer streaming services.

“We are building great momentum as we near our merger with Viacom and head into 2020,” Joe Ianniello, acting CEO, said in a statement.

Viacom reports fiscal results on Nov. 14.

CEO: ViacomCBS Merger Offers ‘Unmatched Scale’

Corporate synergy and scale are two key economic points underscoring the $30 billion re-merger of Viacom with CBS.

Speaking Aug. 14 with CNBC, Robert Bakish, current Viacom CEO and future head of the renamed ViacomCBS, said the combined media company would offer “unmatched scale” with 140,000 television catalog episodes and 3,600 movies, including content from Paramount Pictures and CBS Studios.

Bakish said CBS’ early move toward direct-to-consumer content distribution with CBS All Access and Showtime OTT, and Viacom’s acquisition of ad-supported VOD service Pluto TV well-positioned the rebooted media company in the in the streaming video era .

“[That’s] not something people have talked about a lot [regarding the merger],” he said.  “You unite those two together and you really have a D-to-C ecosystem. Very compelling, both with substantial — millions of users.”

When asked whether ViacomCBS could successfully match Disney, Netflix or WarnerMedia, Bakish said scale could be viewed subjectively.

“Between the studios that we operate, Paramount, CBS Television Studios, Nickelodeon Animation and Viacom International Studios, we have 750 series ordered or in production. There is true content scale here,” he said.

“There’s no question the companies are stronger together than they were independently. And, you know, we’re going to start executing with that.”

The executive defended the companies’ downward revised cost savings from $1 billion to $500 million.

“This is excluding programming, excluding marketing, excluding revenue. So, there’s a very material opportunity. And as we get into it we’ll move forward and begin to realize that [cost saving],” Bakish said.

The initial pushback on the deal from former CEO Les Moonves disappeared following  the executive’s ouster due to #MeToo allegations.

Bakish contends the cultures at Viacom and CBS have a lot in common — with both companies focused the content creation and distribution.

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“An employee of CBS News loves CBS News, just like an employee at MTV loves MTV,” he said. “There’s incredible value in the combination. You look at the strategy we’re going to start executing against. Building a real leadership position in D-to-C through this combination of subscription product and ad-supported product. This ecosystem, tremendous opportunity there. You look at expanding the partnerships and building new partnerships with advertisers, with distributors. Tremendous opportunity there for all of the people that work in that area. You look at being one of the most significant content suppliers in the world. Tremendous opportunity there. So, I think very quickly this culture will come together.”

With Moonves out, former CFO Joe Ianniello has held the acting CEO position. Following closure of the merger, he will become CEO of CBS, reporting to Bakish.

Ianniello reportedly has a clause in his employment contract paying him $70 million severance should he not retain the top executive job.

“I’ve known Joe Ianniello for 20 years,” Bakish said. “I have tremendous respect for what he’s done at CBS. He’s clearly a world class executive. He and I have spoken a lot in the days leading up to yesterday. And including yesterday. And there is a tremendous interest, joint interest, in unlocking the value of these combined companies.”

Bakish said Ianniello would take the leadership position, running the CBS branded assets upon closing.

“We need someone to run those assets,” he said. That’s a big complicated business. He is ideally suited to do it because he has, you know, 20 years of knowledge in that space and a real passion for it. At the same time, he knows that we have to create value from these assets. We are going to have to work across the company. He’s 100% committed to it and I can’t wait to get on with it with him.”

 

CBS, Viacom Re-Merger Nearly Complete; CBS Eyeing Higher Price Point for International ‘All Access’ Rollout

As expected, the Viacom and CBS re-merger could reportedly be announced as early as next week, pending last-minute stock exchange issues.

Fox Business’ Charlie Gasparino Aug. 9 on Twitter said the deal reuniting CBS with parent Viacom after a 13-year split is in the hands of the companies’ respective boards.

Viacom and CBS are majority owned by family-owned National Amusements, which is operated by Shari Redstone on behalf of her ailing 96-year-old father, Sumner Redstone.

Shari Redstone has pushed for the merger, claiming media consolidation is a perquisite for navigating the rapidly changing media landscape and over-the-top video distribution. She also wants Viacom CEO Bob Bakish to lead the combined companies.

Redstone’s strategy was initially rebuffed by former CBS CEO Les Moonves, who wanted the top job. With Moonves out following #MeToo issues, consummation of the merger seemed a formality.

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Separately, CBS says it will have 25 million combined CBS All Access/Showtime OTT subscribers by 2022.

To get there the media giant is rolling out All Access internationally in attempt to borrow a page from Netflix’s subscriber growth playbook.

All Access, like Hulu, is available with limited ads for $5.99 monthly, or ad-free for $9.99 ($11.99 for Hulu).

Speaking on the Aug. 8 fiscal call, acting CEO Joe Ianniello said the company would target Latin America and Europe with the more expensive $9.99 price point.

“Two-thirds of the All Access subs are taking the limited commercial option,” he said. “So obviously, the vast majority of that is the $9.99 price point.”

Ianniello contends there is strong demand for premium content delivered via broadband in the international marketplace.

“I just look at the number of people in the consumption of Netflix,” he said. “I’m very encouraged that this is single-handedly the largest opportunity that we have in front of us.”

Ianniello said CBS targets international distribution of proprietary content on franchise-per-franchise basis. Characterizing the U.S. market as “limited” to 325 million people, the executive contends a global audience in the billions satisfies long-term fiscal goals.

“Our thought is if [international is] willing to pay us [$9.99], we’re going to look at that hard,” Ianniello said. “But if they’re not, we’re going to put it through our own [domestic] infrastructure.”

With Disney announcing it would bundle pending SVOD service Disney+ with ESPN+ and Hulu, Ianniello said CBS is content limiting its OTT bundling to All Access and Showtime.

“I can understand why others want to kind of do that together because people will subscribe for different reasons,” he said.

With All Access nearly five years old, Ianniello says the company understands its appeal and marketing with Showtime.

“It’s an opportunity we don’t force consumers to do it,” he said. “They can buy part; if they want to buy them together, we obviously discount that. We think again those are different offerings and complementary as well.”

CBS Extends Joe Ianniello as ‘Acting CEO,’ Suspends Search for New Chief Executive

CBS April 23 announced it has extended Joe Ianniello’s role as acting CEO until Dec. 31. The contract extension would appear to be permanent as the CBS board said it would suspend its search for another CEO.

Ianniello, who was COO under former CEO Les Moonves, was named interim CEO in 2018 after Moonves was forced to resign following allegations of inappropriate behavior in the workplace.

Les Moonves and Joe Ianniello

“Joe has demonstrated exceptional leadership during this time of unprecedented transition at CBS,” the board said in a statement. “He steadied the ship with some key appointments and a commitment to cultural change and steered it forward by focusing CBS’ operations around its growing direct-to-consumer strategy.”

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As COO, Ianniello developed spearheaded the company’s monetization strategy across platforms, including retransmission consent fees and reverse compensation from affiliates, as well as the licensing of the CBS content for digital streaming and broadband services. He was also instrumental in launching SVOD service CBS All Access, which has developed into one of the company’s fastest growing initiatives.

He led the Company’s acquisition of Network 10 in Australia and the split-off of CBS Radio (CBSR) through a merger with Entercom. In addition, he led the conversion of CBS Outdoor into a real-estate investment trust, marking a first for an outdoor advertising business.

Prior to being COO, Ianniello was CFO (2009-2013), overseeing the company’s financial operations across all business units. He joined CBS in 1997.

 

CEO: CBS May Put OTT Originals on Broadcast TV to Drive SVOD Traffic

For years Hollywood studios and producers put primetime TV shows on DVD to jumpstart consumer interest in a show’s upcoming fall season launch or syndication availability.

Now, CBS is considering bowing past seasons of original over-the-top video programs from the CBS All Access platform on broadcast television to help drive consumer interest in subscription streaming video.

All Access and Showtime OTT, which finished 2018 with more than 8 million combined subscribers, are projected to reach 25 million combined subs by 2022.

Speaking on the Feb. 14 fiscal call, acting CEO Joe Ianniello said the concept has become reality to media companies producing and distributing original content in the digital age.

“The great part of owning the intellectual property is you have [distribution] choices,” Ianniello said.

He said the traditional business model releasing an older TV show into syndication was to monetize catalog programming, increase consumer awareness of the program (if still airing on primetime) and the broadcast network in general.

Specifically, CBS management is considering broadcasting the original season of “The Good Fight,” the CBS All Access exclusive spin-off of “The Good Wife,” which ended its primetime broadcast run in 2016, on primetime.

“What if … we put it on the CBS broadcast network to drive subscribers back to CBS All Access?” said Ianniello, adding that SVOD original programming has to have mass appeal to work on the broadcast network.”

“The promotional platform that the TV network has is bigger than the streaming platform and/or other cable networks,” he said.

Separately, Ianniello said that unlike other media companies pulling original programs from SVOD services such as Netflix, CBS would continue to shop content to the best distribution channel.

As a result, Get Out director Jordan Peele’s reboot of “The Twilight Zone” for All Access in the United States will be distributed by Netflix internationally.

“If a third-party is better able to monetize it than our infrastructure, we should take the excess value we’ve receive and redeploy it into making more content,” Ianniello said.

Regardless, the executive said putting online original programming on broadcast TV could reduce content development costs and make more efficient use of intellectual property and CBS franchise brands.

“We’re discussing it as we speak,” Ianniello said.

 

 

 

CBS Eyes 25 Million Combined ‘All Access,’ ‘Showtime OTT’ Subs by 2022

CBS is projecting 25 million combined subscribers by 2022 for over-the-top video services CBS All Access and Showtime OTT. The guidance follows the two subscription streaming services reaching 8 million combined subs at the end of 2018 – two years ahead of schedule.

All Access launched in 2014 for $5.99 monthly with ads ($9.99 without) featuring original, primetime and catalog CBS programming online and streaming devices without long-term contract.

Showtime OTT bowed in 2015 featuring the premium channel’s original content and third-party movies for $10.99 monthly fee.

“We are generating significant momentum with our direct-to-consumer platforms, which provide a great return-on-investment and represent one of our most powerful long-term growth drivers,” Joe Ianniello, acting CEO said in a statement.

Indeed, growth in Showtime OTT subscribers through Amazon Channels helped drive cable networks revenue up 8% to $551 million for the fourth quarter (ended Dec. 31, 2018) from $508 million in the prior-year period. Other revenue drivers included higher international licensing sales, and revenue from the Deontay Wilder/Tyson Fury pay-per-view boxing event in December.

Operating income of $193 million decreased 7% from $207 million for the same prior-year period, reflecting an increased investment in programming.

Entertainment segment revenue — which includes All Access — dipped 1% to $2.83 billion from $2.86 billion, reflecting 14% lower content licensing and distribution revenue, mainly as a result of the timing of international licensing sales and several large domestic sales in the fourth quarter of 2017.

Affiliate and subscription fees grew 17%, led by growth from All Access and higher revenue from station affiliation fees and virtual MVPDs. Advertising revenue increased 2%, reflecting revenue from Network 10, which was acquired in the fourth quarter of 2017.

This increase was partially offset by the absence of the broadcast of “Thursday Night Football” in 2018. Underlying CBS Network advertising for the fourth quarter of 2018 increased 2% from last year’s fourth quarter.

Entertainment operating income of $438 million for the fourth quarter of 2018 decreased 6% from $465 million for the same prior-year period, primarily reflecting the lower revenue and an increased investment in content and digital initiatives. These decreases were partially offset by the absence of programming costs associated with “Thursday Night Football.”

 

 

CBS CEO: Diversity of Distribution Driving Original Programming

With more than 8 million combined subscribers for CBS All Access and Showtime OTT expected by next year, CBS Corp. interim CEO Joe Ianniello says over-the-top video distribution is driving original content production.

“We put [content] originals on [All Access and Showtime OTT],” Ianniello said on the fiscal call — his first since replacing the ousted Les Moonves. “We saw it was working. We saw the consumers wanted more. So, we’re putting more on it. We’ve raised the [subscriber] targets. We’ve accelerated them. [And] we’re going internationally [Canada].”

CBS Studios currently produces four series for Netflix — “Insatiable,” “Dead to Me,” “American Vandal,” and “Unbelievable.” It also produces new drama, “Your Honor,” for Showtime, and psychological thrillers, “Tell Me a Story,” and “Why Women Kill,” for All Access.

As previously, reported CBS produces “Star Trek: Discovery” for All Access, and has 2018 Oscar winner Jordan Peele (Get Out) rebooting “The Twilight Zone.”

“An All Access subscriber watches twice as much content as [someone] who watches on CBS.com,” said Ianniello.

“We have nice diversity in terms of the consumption of the content. And that’s why we’re putting more originals on both of these services, because it’s really driving again the intent to subscribe and it’s reducing churn. And those are the two things we’re really toggling back and forth as we make these investments.”

CFO Christina Spade said OTT video is allowing Showtime to expand beyond its 26 million pay-TV households and reach consumers untethered to traditional cable bundle.

“The world of OTT has opened up so many options with what we can do with data analytics and really unlock and target our marketing,” said Spade. “So, two years into it, we have a lot of great uses of the data, but even as we get further educated and learn even more about our consumer, the scale of the business is huge.”

 

Richard Parsons Resigns as Interim Chairman at CBS, Citing Health Issues

Richard Parsons has resigned from the CBS board of directors, including his position as interim chairman.

In his place, CBS named veteran entertainment executive Strauss Zelnick to assume Parsons’ positions – garnered following the resignation of Les Moonves due to allegations of inappropriate workplace behavior. The appointment follows a unanimous Oct. 21 decision by the CBS board.

The 70-year-old Parsons, former chairman/CEO of Time Warner who once also served as interim CEO of the NBA’s Los Angeles Clippers franchise after the league banned (now former) owner Donald Sterling for life for racism, continues to deal with previously diagnosed health issues related to multiple myeloma, a blood cancer related to lymphoma and leukemia.

“As some of you know, when I agreed to join the board and serve as the interim chair, I was already dealing with a serious health challenge – but I felt that the situation was manageable,” Parsons said in a statement. “Unfortunately, unanticipated complications have created additional new challenges, and my doctors have advised that cutting back on my current commitments is essential to my overall recovery.”

Zelnick, 61, who has held management roles in all forms of entertainment, including recorded music at BMG Entertainment, motion pictures and television programming at 20th Century Fox, international television distribution at Columbia Pictures, and chief executive of Take-Two Interactive Entertainment, oversees a management team led by interim CEO (and former CFO) Joe Ianniello.