CBS Chairman Les Moonves touted his company's entry into the movie business Thursday, telling analysts that the broadcaster would be able to make films budgeted at $10-50 million "risk free." In a conference call to discuss CBS's quarterly earnings report, Moonves emphasized, "I'm talking about zero risk" and said that under his plan the films would be profitable "before a dollar is achieved in box office." He suggested that profitability could be guaranteed by DVD and foreign sales. Moonves indicated that one of the ways he intended to keep costs down was to employ its current resources. "We're not going to have a large studio overhead. We're going to do it in a very cautious manner." Moonves said that the movies are not being produced for the network "obviously," but that many will end up on cable. He noted that CBS's pay-TV channel Showtime has deals with three studios that end in 18 months and that its own movies will supplant some of the studios'. In any case, he said, he believes that Showtime will not have to "do the large output deals" that were required in the past, and that cutting them back will reduce the channel's expenses. He also said that Showtime plans to increase the number of scripted original series. Analysts said that Moonves's plans appeared to be aimed at diversifying the company so that it would not have to depend so heavily on advertising revenue, which has been hit by a slowing economy.
04/08/2006
