The CBS Corporation said on Wednesday that its revenue and earnings increased in the third quarter, reflecting sturdy growth in licensing fees for television shows and subscription fees for stations that more than offset a slight drop in advertising revenue.
CBS’s total revenue was $3.42 billion, up from $3.37 billion in the same quarter last year. Its net income rose 16 percent, to $391 million from $338 million last year. Its earnings per share were 60 cents, compared with 50 cents a share last year.
Excluding a one-time adjustment, the company earned $426 million, or 65 cents a share.
Leslie Moonves, CBS’s chief executive, attributed the results to a continuing “transformation” of the company into one that relies less on advertising revenue and more on distribution revenue than it used to.
The most recent example of a new distribution deal came on Monday, when the company made a multiyear deal with Hulu to stream episodes of old TV shows like “I Love Lucy” on the Web site.
Mr. Moonves, who signed a contract extension last month, said on a conference call with investors Wednesday afternoon that CBS was considering, for the first time, “opportunities to license past seasons of current CBS and Showtime programming.” Such deals could let viewers catch up on “The Good Wife” or “Homeland” through services like Hulu or Netflix.
Advertising still accounts for more than half of CBS’s revenue. In a few months, the network will televise the year’s biggest advertising event, the Super Bowl. Mr. Moonves said Wednesday that some 30-second commercial spots during the game had sold for more than $4 million.
But advertising revenue dipped 3 percent companywide in the third quarter, dragged down by weakness at CBS Radio and six nights of pre-empted prime-time shows during the national political conventions. The company’s chief financial officer, Joseph Ianniello, said some political ad buys were shifted to the fourth quarter from the third, which ended in September, “as campaigns chose to spend their dollars closer to the election.”
Despite the advertising headwinds, the segment of CBS that includes its broadcast network and its studio posted a 3 percent gain in revenue, in part because of increases in retransmission fees and television license fees. Revenue in the segment that includes its local stations increased 1 percent, with gains at its television stations offset by losses at its radio stations.
Acknowledging a continued drift away from live viewing of prime-time TV shows, Mr. Moonves said CBS would “make it a priority” to get paid by advertisers for all viewing. Ad rates are currently set based on the viewing of commercials within three days of their air date, a standard known as C3, but Mr. Moonves said CBS wanted to be paid for viewing “beyond C3.”
Article source: http://mediadecoder.blogs.nytimes.com/2012/11/07/profit-rises-16-at-cbs-on-higher-licensing-fees/?partner=rss&emc=rss
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