Netflix, Inc. (NASDAQ:NFLX) is not a threat to CBS Corporation according the company’s CEO. Les Moonves, Chief Executive at CBS, says that his company is looking at the Video on Demand service as an opportunity, rather than a threat.
The television giant is even considering partnering with the streaming service for a premium original show.
Moonves said that CBS would not consider Netflix, Inc. (NASDAQ:NFLX) a threat until it was putting out 22 hours of premium original content every week. Until then the company will be regarded as a partner operating an exciting new platform from which CBS can sell its programming.
CBS Corporation (NYSE:CBS) is one of the original three television Networks in the United States, and it is currently the second biggest television network in the world behind the state owned British Broadcasting Company. One might assume that such an old traditional television network might perceive Netflix as a large threat, not so according to these comments.
The remarks were made by Moonves to analysts during a discussion of the company’s fourth quarter results. Shares in CBS Corporation (NYSE:CBS) rose by more than 3 percent in trading today after the company announced record fourth quarter results. In the last three months of 2012 the firm earned 64 cents per share on revenues that totaled $3.7 billion.
Shares in the broadcaster have risen by more than 16 percent so far in 2013; a strong rise for the firm, but dwarfed by the gains made by Netflix, Inc. (NASDAQ:NFLX). Since the start of 2013, Netflix, Inc. (NASDAQ:NFLX) shares have risen by more than 100%. The firm recorded very positive earnings, and it’s original content gains have really made investors excited about the company’s stock.
The comments from the CBS Corporation (NYSE:CBS) CEO may seem friendly, but there must be some kind of anxiety about the future of the television business in the background. Netflix is moving quickly to provide a service that CBS simply cannot, and that service has to be undermining the firm’s advertising revenue.
What the comments really mean is that this battle will have to be fought another day. Television networks are, however, helping to subsidize the creation of a large competitor by giving their programming to Netflix, Inc. (NASDAQ:NFLX). At some point in the coming years the situation will come to a head.
The firm has also been busy securing content deals to augment its original offerings. Original programming is really just starting for the company; it will be content from other producers that really attracts users for some time to come. The firm’s stock rose a fraction in trading on Friday.