Les Moonves and Jim Lanzone on Aereo, Latin America, and CBS’s future

Fortune Brainstorm TECH 2014
Fortune Brainstorm TECH July 15th, 2014 Aspen, CO 11:35 AM BIG BANG QUERY: WHAT’S NEXT FOR VIDEO? Jim Lanzone, CEO, CBS Interactive
Les Moonves, CEO, CBS
Moderator: Adam Lashinsky, Fortune Photograph by Kevin Moloney/Fortune Brainstorm TECH
Photograph by Kevin Moloney/Fortune Brainstorm TECH

CBS president and CEO Les Moonves had barely sat down when Fortune senior editor Adam Lashinsky began the interview with a reminiscence of last year’s Brainstorm Tech, “A year ago we had Aereo onstage, he’s not here this year, you are.” Lashinsky said, referring to the missing Aereo CEO Chet Kanojia.

“The victors get invited.” Moonves quipped, referencing the recent Supreme Court decision saying that the over-the-air internet TV provider was infringing on CBS’s copyright. But Aereo’s loss in the Supreme Court didn’t mean an end to the discussion about their technology and the implications that it had on legacy broadcast networks. Moonves said that his problem with Aereo was that the service decided to work in a way that bypassed the typical broadcast business model of licensing and fees in order to focus on the over-the-air . “The issue got very confused. They presented a very good case to the Supreme Court, although it wasn’t fair; They clouded the issue,” Moonves said, disappointed that Aereo’s legal strategy made it seem like CBS (CBS) was stopping innovation. Moonves pointed out that that there are many places to stream CBS content online, “including CBS.com.” He also admitted that, had Aereo won, CBS would have developed similar technology to compete.

President and CEO of CBS Interactive, Jim Lanzone, was on hand to provide backup to Moonves’s show of technical investment. He pointed out that CBS Interactive heads up divisions from CBS News, and CBS Sports, to CNET and other non-CBS branded online presences, making him one of the only executives to interact with the different divisions. And, online has the potential for major profits: CBS makes more money per streaming viewer than per television viewer. Lanzone credited that to CBS’s superpremium, broadcast-quality editorial content, saying that online video is “not just about cat videos and skateboarding anymore.”

CBS recently spun off their outdoor advertising business — basically billboards — in order to focus on its content strategy. Moonves said CBS’s amount of revenue from advertising went from 70% to 50% due to an increase in monetization from new ways to sell the content. One of those new buyers? Amazon (AMZN), which Moonves admitted was somewhat of a “frenemy” — both a customer and a competitor.

In addition to the domestic business, the two execs talked about a focus on an exploding international business. Lanzone mentioned a online division was seeing about 200 million users a month in China. Moonves talked extensively about opportunities in Latin America, as well as with Spanish-speaking US residents. And what about Spanish channel Univision, which recently went on the market? “We’re not interested in buying anything right now.” Moonves said, though he expressed admiration for the channel.

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