Back in November, CBS President and CEO Les Moonves confirmed in a conference call with Wall Street analysts that Apple’s late co-founder Steve Jobs approached the studio with a subscription-based iTunes content deal. It had been rumored at the time that Apple was looking for premium content partnerships to accompany a rumored Apple-branded television set, dubbed by the press the iTV.

Moonves was quoted as saying that CBS had decided against joining the initiative because it was based on an ad split. Yesterday, the executive shed more light on the matter. Confirming the original report, Moonves (portrayed as the man who said “no” to Steve Jobs) has revealed that Jobs actually didn’t want to pay a dime for CBS content that the likes of Netflix spend hundreds of millions of dollars to license…

According to an interview with CNBC’s “Closing Bell” with Maria Bartiromo yesterday afternoon, Moonves said:

There was a story reported, which was true, about Steve Jobs and I discussing putting CBS content on Apple, but we felt he didn’t want it pay for it. What Netflix is paying for right now, they’re giving us hundreds of millions for that content, Steve Jobs wanted us to put the content on and play with him on terms of subscriptions. We didn’t think that was the wisest thing to do. We need to be protective of our content. We make billions in advertising. We make billions in syndication. We make hundreds of millions in retransmission. The idea is to put your content online, that enhances that, doesn’t take away or cannibalize our main business. Our content are the family jewels.

Of course, CBS is entitled not to accept the terms Jobs was offering, but bear with me for a second here.

It’s always been my opinion that Hollywood die-hards are all about short-term gains. Theirs is a cut-throat business so it goes without saying that Hollywood is spooked by what had happened to the music industry. Put simply, the studios reluctantly experiment with new distribution models unless big bucks change hands.

What would it cost CBS to offer its programming to Apple on a limited-basis and based on a subscription-sharing scheme? If carrier AT&T was willing to share its revenue collected from the original iPhone customers with Apple, I don’t see why a similar deal wouldn’t cut it for CBS.

Besides, they could have always agreed to a time-limited deal to test waters and back out later if it didn’t work out as planned.

I understand that content owners must protect their existing revenue streams, but it is clear by now that people want to pay for their entertainment once and access it anywhere and on any device.

This mess needs to be sorted out, but I have a feeling no amicable solution will be reached due to vested interests unless the government intervenes to somehow set the rules of the game.

Mind you, I’m not being biased: I’m just saying we’re not there yet (though the technology is) and you know who to blame.

Perhaps Disney will come to the rescue?

Feel free to argue with me down in the comments.

  • sorry but i always wanted to say this…”FIRST”…lolz

  • sorry but i always wanted to say this…”FIRST”…lolz

  • So they dont want to sell digital copies since they make most of thier money from physical copies!

    Surely digital will lower physical copies! But they will have wider customer reach!

    Do they even realize that in 5 years digital media will be at 80% while physical at 20% ?

  • The government should never be involved in the free market. If CBS doesn’t want to play, then they won’t play. Maybe someone else will.

  • Anonymous

    If Steve jobs was offering a revenue split with ads, that makes perfect sense. Why should Apple pay upfront for content, when CBS’s revenue will come in the form of subscribers that Apple is able to acquire

  • The thinking from CBS is so backward and non-progressive. But, they will jump on the bandwagon once other networks start to reach an agreement with Apple. The process will be ongoing – like ITunes was in the beginning – and then the archaic thinking will look ridiculous in hindsight.