Moonves looks forward to healthy upfront
CBS profit surged 80% last quarter as the bucks rolled in from digital streaming deals and syndication.CEO Leslie Moonves touted a company that’s becoming less dependent on advertising for revenue but one that he said is still poised to dominate the broadcast upfronts that unspool in Gotham in several weeks. “We will lead it again this year, both in volume and CPMs,” he said during a conference call with investors Tuesday. He called the upfront market healthy and said advertising accelerated in the first quarter from the fourth. The network has 18 pickups, all renewals, set for its primetime sked and one more nearly done, a continuity he said advertisers like. The first major media company to report earnings this season saw net profit jump to $363 million for the quarter ended in March from $202 million the year before. Revenue rose 12% to $3.92 billion. Advertising revenues increased 5%, reflecting growth in network primetime and sports advertising. Political ad spending is expected to ramp up in the second half of the year as the general election gears up. Affiliate and subscription fees rose 7%. CBS shares popped 2.63% in after-hours trading to $34.30. Entertainment segment operating income surged to $370 million from $230 million. Revenue grew 16% to $2.32 billion driven by the licensing of TV shows for digital streaming and syndication, higher advertising revenues and increases in retransmission revenues. “Syndication, retrans and online streaming are having a huge impact on our numbers and are not directly tied to the economy. Many of these revenue sources did not even exist a few years ago,” Moonves said. “NCIS: Los Angeles,” “The Good Wife,” “Hawaii Five-0” and “Blue Bloods” will all launch in syndication starting next year. CBS is also boosting its output for other nets, producing for USA, Turner and Showtime. “We are now expanding and looking to do that,” Moonves said. Network ad revenue grew 8%, with half from the timing of the semifinals of the NCAA Tournament. Cable networks saw profits rise to $204 million from $147 million on revenue up 15% to $452 million. Growth was driven by higher licensing revenues from digital streaming of Showtime original series and increases in rates and subscriptions at Showtime and Smithsonian Networks. Local broadcast revenue, including TV and radio, was about flat at $622 million. Profit eased to $138 million from $143 million. CBS Television Stations revenues increased 2% from the same quarter last year. CBS Radio revenues dipped 2%. CBS said higher spending by automakers and retailers and retrans revenues were offset by lower ad spend from the utilities and service industries. At publisher Simon & Schuster, profits were up by $3 million to $8 million. Revenue grew to $176 million from $155 million. The strong quarter reflects growth in the sales of more profitable digital content as well as higher print book sales. Sales of digital content increased 64% in the quarter, repping about 26% of total publishing revenues, the highest to date. Bestselling titles included “Kill Shot” by Vince Flynn, “Lone Wolf” by Jodi Picoult and continued sales of fourth-quarter releases “Steve Jobs” by Walter Isaacson and “11/22/63” by Stephen King. Outdoor advertising narrowed its losses to $2 million from $12 million. Revenues nosed up to $416 million from $413 million.