International sales of various incarnations of the famous “Star Trek” series helped boost second-quarter performance at CBS Corp., a sign of the company’s growing reliance on monetization of its content to fuel its engines.
CBS Corp., owner of the CBS broadcast network and the Showtime cable service, said net income totaled $423 million, or 93 cents a share, up from $332 million, or 67 cents a share, a year earlier. The year-earlier quarter included restructuring charges of 7 cents a share, related largely to CBS-owned radio and television station. The figures show a 27% increase in profit for the period.
Revenue in the second quarter rose 2%, the company said, to $3.29 billion from $3.22 billion in the year-earlier period.
CBS said its gains were driven by a 16% increase in the money it gets from content licensing and distribution, and largely by the licensing of the five “Star Trek” series to Netflix, to which CBS controls the rights, outside of North America. “It was a lot of money, and in U.S. dollars,” said Joseph Ianniello, the company’s chief financial officer, during a conference call with investors. The broadcaster of “The Late Show” and “The Big Bang Theory” said it also saw growth of 44% in fees from retransmission from affiliates and revenue from digital distribution. Advertising revenue from the company’s TV operations, its primary engine, fell 2.6% to approximately $1.5 billion.
CBS CEO Leslie Moonves said the company’s efforts to distribute video content in new ways were gaining traction. He said CBS had notched more than two million subscribers to its Showtime broadband service and its CBS “All Access” subscription video on demand product. He also praised a recent deal CBS struck with Apple to put a video series based on the segment seen on James Corden’s “Late Late Show” on its TV service, noting that the two companies could cross-promote content. The pact also makes CBS a supplier to Apple and creates more buyers for CBS content down the line, Moonves said.
Still, executives predicted robust advertising activity in the second half of the year, owing to higher prices the company secured for its ad inventory in the 2016 “upfront” market, when U.S. TV networks sell the bulk of their ad inventory for the coming season. Moonves said CBS had seen robust interest in late-night programming and advertising in NFL football.
CBS said operating income in its largest segment, its TV-network and studio operations, rose 34% to $262 million. The company cited growth in revenue from the sale of “Star Trek” rights to Netflix as well as a rise in fees from affiliates and distribution as reasons for the rise. At the company’s cable networks, operating income rose 3% to $227 million, compared with $220 million a year earlier. Revenue fell 13%, owing to last year’s showing of a popular pay-per-view boxing match between Floyd Mayweather and Manny Pacquiao boxing event, the highest-grossing pay-per-view event in recent memory.
Operating income at the company’s book-publishing unit rose 4% to $26 million despite a decline in revenue, which was offset by lower costs.