In late March, CBS announced its decision to buy half of TV Guide Network for more than $100 million, which the company will rebrand and operate with co-owner Lionsgate, in the long run. CBS will have the advantage to present its repurposed CBS programming to TV Guide Network viewers from more than 80 million homes. Zintro experts share their opinion on this recent acquisition and what CBS will gain from this investment.
Entertainment executive, Rene Bourdages agrees that the primary goal of this acquisition was to reach more than 80 million homes, which TV Guide Network already has. “That’s a lot of potential eyeballs that Moonves might potentially lure with repurposed CBS programming. It’s all about instantly acquiring access to households without being on a discretionary cable tier,” he notes. Bourdages further recommends the acquisition and rebranding of an existing network for media companies planning to create a basic cable channel, since customers wouldn’t be willing to add more channels to their existing bundled-subscription packages. “Recently, Al Jazeera acquired Current TV for that same reason. We can only assume Moonves will use this new ‘beachfront property’ to build the CBS brand and gain shares of viewing and advertising revenues,” he adds.
According to broadcast expert, Herb Rossin, what CBS gains for $100 million is a bargain. “First, a great new platform. Second, they get carriage on most cable systems. Third, imbedded viewers and advertisers and finally a ‘test network’ to run new programming and new concepts without using CBS. It’s very similar to what the automobile companies use to do with minor brands-test,” Rossin explains. “All this without the launch process, without the hiring problems and the technical issues. Now think what can be accomplished with advertisers. Combo deals, cross promotion, etc. All in all it makes a lot of sense. Take it from one who currently is involved with launching a new cable network. I would rather buy than create.”
As former TV anchor and producer, Mark Grimm indicates, it will be a successful investment provided that CBS implements the right marketing strategy and programming. “All the networks are looking for more opportunity to distribute their programming across as many platforms as feasible,” he says. “Much of the success or failure of this venture will depend on the programming CBS produces. Of course, how well they market it will factor in, too.”
By Idil Kan
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