Reviving CBS - The Leslie Moonves Way
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Case Code: BSTR232 Case Length: 19 Pages Period: 1990-2006 Pub Date: 2006 Teaching Note: Available |
Price: Rs.400 Organization: CBS Television Industry: Media, Entertainment and Gaming Countries: US Themes: Leadership, Revival, Competition, Trends |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
CBS in Trouble
The early 1980s was a period of rapid growth of cable television in the US. Cable channels such as Home Box Office (HBO), started in the late 1970s, became a 24-hour channel in 1981, and Ted Turner's (Turner) Cable News Network (CNN), founded in 1980, started gaining popularity. This had put an end to the monopoly of the three television networks. In 1985, News Corp., set up a fourth television network - FOX, increasing the competition further. In 1985, Turner's CNN became very successful and he made an attempt to buy CBS. To block Turner's bid, CBS sought the help of Tisch, a multi-millionaire who owned Loews Corporation, which had interests in cigarettes, watches and hotels. Backed by Paley, Tisch bought a 25 percent equity stake in CBS and assumed the posts of President and CEO in 1986. Paley was named the Chairman of CBS...
The Turnaround
Among the good things that happened under Tisch, one was the successful broadcast of the Winter Olympics in 1992. Others were the acquisition of David Letterman (of the famous comedy talk show Late Night with David Letterman) from NBC in 1993, and the appointment of Leslie Moonves (Moonves), the President of Warner Brother Television (WB) and successful television producer, as President of CBS Entertainment, in July 1995...
The Launch of 'Survivor'
By 1999, CBS was moving in the right direction. CBS had replaced some of the fading hits like The Nanny with shows such as Becker, and Queen of Hearts. During the same time, CBS shows such as Touched By An Angel (drama), and Everybody Loves Raymond (comedy), and CBS Sunday Movie were gaining popularity among adults. However, CBS still did not have even a single show for the young audience; the top three spots for this age-group were still occupied by NBC's ER (medical drama), Friends, and Frasier (sitcom). Moonves was aware of this, but wanted the transition to happen slowly after the 1995-96 debacle of its all-youth lineup...
Focus on Research
To learn about the audience's preferences and views on its shows, CBS started a research center known as 'Television City' at the MGM Grand in Las Vegas in April 2001. The main aim of the center was to engage in continuous interaction with the television viewing audience. The state-of-the-art center consisted of two screening rooms, each with a capacity of 25 seats, which conducted screening of pilots and shows under production to the audience for free. The screening began at 9:00 am everyday and was conducted every 20 minutes. The audience (focus group) was made to sit in either of the screening rooms and was monitored through a glass window by the CBS executives sitting in the other room...
CSI Takes Charge
In October 2001, Survivor: Africa debuted. However, the series attracted fewer viewers than its predecessors. In February 2002, Survivor Marquesas (Survivor IV) was launched and about 23 million people watched the debut, which was eight percent less than the number of people who watched Friends. During the 2001-02 season, CBS had only CSI among the top five shows at #2 after Friends. NBC was once again the most watched network for the season...
CBS Regains Ground
During the 2003-04 season, CBS again emerged as the most popular network in terms of viewership and also as the leader in the Thursday night prime time slot. Though its target audience was 25-54 years old, many of its shows featured in the top ten shows list in the 18-49 demographic too. The repeat telecasts of its hit shows (attracting only one-third of the original audience) were viewed by more people than the repeat shows of its competitors...
Exploring New Revenue Opportunities
The traditional television networks had been facing stiff competition from the cable television and the Internet, which had been taking away both the advertising revenues and the viewers. To ward off the threat from cable television and the Internet, CBS started looking out for other revenue generating opportunities. In early November 2005, CBS partnered with Comcast Corporation to sell CSI, NCIS, Amazing Race, and Survivor shows on a video-on-demand platform at 99 cents per episode...
The Road Ahead
Though CBS was the most watched network during the 2005-06 season, it had a few issues to sort out. In the 2005-06 season, CBS lost two percent of its audience as compared to the 2004-05 season (Refer Table III for viewership details during 2005-06). CBS was third after FOX and ABC in the coveted 18-49 year-old segment, where advertisers paid premiums. FOX's American Idol was the most popular show for the second consecutive time during 2005-06 season overtaking CSI and Survivor. In the past couple of years, ABC had been gaining popularity with its hit shows like Desperate Housewives and Grey's Anatomy...
Exhibits
Exhibit I: Profiles of Major Competitors of CBS
Exhibit II: Top Primetime Network Between 1994 & 2006
Exhibit III: CBS Logo in 1951
Exhibit IV: The US Television Industry
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