International Sales Will Cover 60% of TREK 2017 Costs

CBS president bets big on international distribution

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International Sales Will Cover 60% of TREK 2017 Costs

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Les Moonves, president and CEO of CBS, has spoken before about the plans for Star Trek launching a new series next year on the CBS All Access streaming platform, and he spoke again today in front of CBS investors at the Morgan Stanley Technology, Media & Telecom Conference about the nature of the service — and the desire that the digital competitors had for the new series.

About how streaming competitors Netflix, Hulu, and Amazon all tried to purchase the rights to launch the new Trek series, something on which we first reported back in November:

We look at the marketplace, we look at next quarter, but we look at the future. [Netflix] is not our enemy, they’re paying for our content. It’s our job to continue to compete with them. […] They’re our competitor, and that’s okay.

Obviously, a lot of conversation went into [selling to another service], and Star Trek is the family jewel. Paramount owns the film rights, but we retain the television rights.

So we said, we have this property, a very important property… Netflix, Amazon, Hulu, they all offered us a lot of money. They all wanted it very badly.

On the power of international markets, and how the financial benefit will help the new show:

The way we are able to monetize shows today is so much different than it was even five years ago, where there are so many places that will take our programming as [Video On Demand] becomes a bigger player. International [distribution] is exploding, not only with just the established markets but the number of new markets that are opening.

We’re finally in China in a meaningful way; getting paid a meaningful amount of money for our shows — so having good content, the world is getting bigger and bigger and better and better.

The international marketplace, without seeing a word on paper or anything at all, the numbers internationally are astronomical. So that covers about sixty percent of the cost of production right there, before we even begin.

So we said that for this relatively minor investment, this is how we’re going to get All Access to be where we want it to be, where there are millions and millions and millions of subscribers.

By putting that forward, we said to the world, you know what? CBS is really serious about this. They’ve taken this crown jewel of a property and put it in a place where they know there are so many millions of Star Trek fans that [CBS] will pay for this.

It was a decision that took a lot of thought, because we could have taken the quick bucks from Netflix, but it shows we’re investing in a property and we really believe in the future.

He also spoke about the potential of an ad-free tier on the All Access service:

We estimate that the advertising is worth about four dollars [per subscription], so we’re exploring the idea that for $5.99 you can get All Access with advertisements, and for $9.99 you can do it without advertising.

I know Hulu’s tried it, and it hasn’t been very successful — because most people, despite what they say, would rather suffer through the ads and save four dollars than [pay more].

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On his vision for the CBS All Access streaming service:

You walk on college campuses and they don’t have television sets. We think over-the-top is going to become a very viable way to watch television. […] We’ve added [now] what we think will be the most important thing, which is original programming.

As you know, in January of ’17, we will have the new ‘Star Trek’ series on the air, which we know there are millions of big, big fans who will sign up for [it]. And that’s only the beginning of our intent to produce more and more original programming to go on All Access.

No matter how slow or how fast [people transition away from traditional TV viewing], it doesn’t matter, because it’s going to be better. CBS is in a great position, and All Access is something clearly we are going to build. [I’m] not going to give you numbers, but it’s way ahead of projections. We think [in 2017] it’s going to be a significant revenue driver for us.

It is the future, and we’re right there with it.

For those of you outside of the United States still concerned that you won’t be able to easily watch the new series, Moonves’ comments here must surely put those fears at ease. With this kind of international distribution push he’s expecting, we’re sure it’s going to be available to view all over the place without much difficulty at all.

You can listen to Moonves’ entire forty-minute presentation online here.

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