CBS (NYSE:CBS) CEO Les Moonves held court at the Merrill Lynch Fall Media Preview last week. Let's review some interesting highlights.

Content is an expensive king
Moonves spoke about one of my favorite subjects -- the cost of content. Whether you're Disney (NYSE:DIS) or Time Warner (NYSE:TWX), the rising costs of producing compelling content may be the No. 1 issue facing all media companies today. In fact, when it comes to compensating talent, I support even more disclosure than the system currently calls for.  

CBS, according to Moonves, has kept increases in production costs between 2% and 3%. What's the secret? CBS owns a lot of its content, and Moonves believes that owning content encourages financial discipline. Also, he mentioned that he and his team have had a lot of experience on the production side, and that experience lends them a competitive edge. I don't know if CBS will keep the growth rate in production costs at such attractive levels, but it should strive to continue its current managerial protocols.

Should cable channels have all the fun?
Cable networks are pretty cool economic beasts -- they have a cushy dual income stream from subscriber fees and advertising revenues. CBS wants its fair share of cable revenue, too.

When asked about retransmission consent, Moonves seemed pretty confident that over time, he would be able to get cable businesses such as Time Warner Cable (NYSE:TWC) and Comcast (NASDAQ:CMCSA) -- see coverage of Comcast's recent appearance at the same conference -- to pay for CBS content.

This is a crucial part of the CBS growth equation. As Moonves pointed out, the landscape has changed for networks; because of their ability to exert ownership of shows, multiple revenue streams, such as DVD sales and syndication, can be explored. It's only fitting that networks attempt to reap retransmission fees for significant revenue.

You knew this would come up
Did you think you'd get through this article without hearing the word "digital"? Of course not. Moonves knows he has to keep up with all the media Joneses out there. "Digital is the operative word in just about every single one of our businesses," he said. Congratulations, Les, you've certainly read the memo.

Moonves said that digitizing content is great for adding revenue streams tied to advertising. I see his point -- consumers, in a general sense, expect free content when it comes to many digital distribution methods, and prefer to let advertisements pay the way. Focusing on the advertising aspect allows CBS to distribute their shows everywhere -- the more eyeballs, the better.

"Social networking" was the other buzz phrase thrown about. Whether you love News Corp.'s (NYSE:NWS) MySpace or think it's a mere fad on the way toward Web 3.0, you know that the online community has changed everything. Moonves said that CBS' acquisition of was the initial plunge into the social-networking seas. Since then the company has bought or invested in 14 relatively small companies.

Moonves is in no rush to go after bigger fish. "If the price was right, and if it fit in with what we're doing, sure, we would consider that. We're very cautious. We're very conservative about what we do." When asked about bigger opportunities he replied, "Look -- there are two guys in the garage every day of the week. And it's picking the right two guys. That's the idea." That sums up their online acquisition appetite: cautious and the right fit.

The Foolish conclusion
As we all know, CBS used to be a part of the conglomerate Viacom (NYSE:VIA). Post-split, Viacom houses the hip MTV Networks asset, and in my opinion will be a growth story over time. Meanwhile, CBS is doing incredibly well with its own dividend strategy. CBS should continue its focus on expanding deals with retransmission consent and keeping content costs down.

I think shareholders can come away from Moonves' conference appearance feeling good right now about the company's strategy. While some things remain unclear, the company's march towards driving value without sacrificing quality is clear.

The Fool has its eye on CBS: