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CBS would talk to Aereo about a license

Aaron Pressman
CBS Chairman and CEO Les Moonves discusses the decision to choose Stephen Colbert as longtime "Late Show" host David Letterman's successor. Moonves says replacing a man of Letterman's stature was not easy, but the candidate who stood out was Colbert.

CBS (CBS) led the legal fight against Internet television service Aereo, but CEO Les Moonves says he’s now willing to sit down and negotiate with his former adversary.

“We’re more than willing to talk with them,” Moonves said at the Fortune Magazine Brainstorm Tech conference on Tuesday in Aspen, Colo. But, Moonves said, he's still waiting for Aereo to approach him.

Aereo shut down its service after losing to the broadcasters at the Supreme Court last month. But the company, which operated in almost 12 cities, recently said it would seek to get broadcast licenses just like cable systems.

Aereo charged customers only $8 to $12 a month for a selection of local broadcast channels, plus a few networks, which could be watched over the Internet and on mobile devices.

Moonves questioned whether Aereo could afford to pay for so-called broadcast retransmission rights, as cable companies do, and maintain its low prices.

“We are open and willing to talk them about it but I don’t think their business model makes sense, unless they were getting content illegally.”

Aereo set up a system with thousands of tiny antennas in each city and argued that it didn’t need to pay broadcasters because it was just enabling consumers to exercise their individual rights to watch free over-the-air television. In a 6-3 ruling, the Supreme Court said Aereo was too much like a cable operator and thus was required to pay broadcasters licensing fees.

Moonves once worked for Barry Diller, chairman and CEO of IAC/Interactive (IACI) and a leading backer of Aereo. But the two old friends agreed never to talk about the subject, Moonves said.

Moonves was also asked about the dispute between Amazon.com (AMZN) and book publisher Hachette. CBS owns publishing house Simon & Schuster, which is even larger than Hachette.

The CBS president was diplomatic, noting that he spoke with Amazon CEO Jeff Bezos at the recent Sun Valley conference in Idaho. CBS does business with many different parts of Amazon and hopes eventually to produce and sell programming for Amazon’s online streaming service, for example, he said.

Amazon has been reducing its stock of Hachette print titles, delaying ordering times, and turning off its pre-order feature for upcoming titles. But it has not made the same moves against other publishers, such as Simon & Schuster, Penguin Random House, owned by German media giant Bertelsmann, News Corp’s (NWSA) HarperCollins, or Macmillan, owned by German publisher Georg von Holtzbrinck.

On the book side, “We are negotiating with Amazon as we speak,” Moonves said, noting that there were disagreements but without going into detail.