CBS Narrows Q4 Loss; Revenue Rises on Distribution, Streaming

CBS Corp.,which has long depended on advertising to fill its coffers, put the spotlight on other forms of revenue – like subscriptions to its live-streaming services.

The New York owner of the CBS broadcast network and the Showtime pay-cable network said Thursday that it narrowed its fourth-quarter loss with an 11% jump in revenue thanks to increases in the fees the company takes in from distribution of its content and new subscriptions at its recently-launched streaming services. The company said it had garnered five million subscribers to both its “CBS All Access” streaming service as well as an over-the-top version of Showtime.

Speaking to investors during a conference call, CBS CEO Leslie Moonves predicted growing streams of revenue from streaming subscriptions and content licensing. He said CBS would launch “CBS Sports HQ,” an over-the-top sports service, later in February, and a streaming product based on the “Entertainment Tonight” entertainment-news program by the fall of this year.  Executives predicted 2018 results would be buoyed by improved ad revenue related to the coming mid-term elections as well as from content licensing and distribution fees and new subscriptions to digital services.

CBS, which is exploring a potential merger with Viacom Inc.,  said net income from continuing operations fell to $40 million, or 10 cents a share, compared with $271 million, or 63 cents a share, a year ago. The fourth quarter figures include a $129 million charge related to U.S tax reform. Taking out that charge and other one-time items having to do with a pension settlement and restructuring, the company posted adjusted earnings of $1.20 a share. Taking into account effects from CBS Radio, which the company sold to Entercom in November, CBS said it posted a net loss of $41 million, compared with a net loss of $113 million for the fourth quarter of 2016.

Fourth-quarter revenue rose 11% to $3.92 billion, compared with $3.52 billion in the year-earlier period. CBS cited growth of 33% in the revenue it secured for distribution of programming and content licensing. Revenue from subscriptions and affiliate fees rose 20%, led primarily by 31% growth in fees from stations affiliated with the CBS broadcast network.  Advertising revenue fell 3%, the company said, citing elevated sales in the year-earlier period related to high levels of political advertising.

Despite growing challenges from digital-content providers, Moonves said “broadcast television viewership is doing just fine, thank you,” and noted that having programs on a national broadcast-TV network was creating new opportunities for the company. He cited programs that have been developed by CBS’ late-night hosts Stephen Colbert and James Corden, who, respectively have developed series for Showtime and Apple.

Executives also said so-called “scatter” pricing, or prices for advertising that is purchased close to air time, was coming in at levels 40% higher than that established during the industry’s “upfront” negotiations, when U.S. TV networks try to sell the bulk of their ad inventory for the coming season.

And Moonves tamped down concerns that new services like Netflix, which has signed prominent producers Ryan Murphy and Shonda Rhimes to eye-popping production deals valued at hundreds of millions of dollars, would rob CBS of talent opportunities. Moonves said CBS has had to contend with cable networks like HBO for years. “Previously there was very little competition,” he noted, but “we find new talent and we continue to be in business with the best talent.”

At the company’s entertainment unit, operating income rose 25%, to $465 million from $371 million, owing to revenue growth that was partially offset by increased investments in programming. Operating income at CBS’ cable networks, meanwhile, fell 8% to $219 million  Cable Networks operating income of $201 million for the fourth quarter of 2017 decreased 8% from $219 million in the year-earlier period, owing to new investments in programming. Operating income among CBS’ local-media assets fell 37% to $137 million, compared with $216 million in the year-earlier period, owing to a tumble in revenue related to political advertising.


More TV

  • Writers Guild Posts Scathing Video Attack

    Writers Guild Posts Scathing Video Attack on Agency Packaging

    The Writers Guild of America, which is threatening to require members to fire their agents, has posted a scathing video attacking how major agencies conduct packaging. Titled “Agency Conflicts of Interest,” the video explains that compensation for writers has declined by 23% between 2014 and 2016 and blames the agencies for taking packaging fees on [...]

  • TV News Roundup: 'Million Dollar Mile'

    TV News Roundup: 'Million Dollar Mile' Debuts Exclusive First Look

    In today’s roundup, “Million Dollar Mile” releases an exclusive clip and CBS announces premiere dates for three shows.  DATES CBS has announced premiere dates for one new series and two returning series. The new action adventure series “Blood and Treasure” will debut with a two-hour episode Tuesday, May 21 at 9 p.m. right after the [...]

  • WGA Agents Contract Tug of War

    Agents Accuse Writers Guild of Threatening to Throw 'Industry Into Chaos'

    UPDATE – The dealmakers appear to be getting nowhere. Negotiators for Hollywood agents and the Writers Guild of America have achieved little progress at their seventh session on Tuesday, with a chaotic scenario looming on April 7. “When Guild leadership is ready to move on from their declared threatening phase, we stand ready to work [...]

  • Jussie Smollett Empire

    Assessing 'Empire' Options After Jussie Smollett Charges Dropped

    The shocking Jussie Smollett saga took another twist on Tuesday after prosecutors announced they have dropped all charges against the “Empire” star. Smollett had been indicted on 16 counts of filing a false police report, but now that those counts have all disappeared, studio 20th Century Fox finds itself in a sticky situation as to [...]

  • Jussie Smollett

    Jussie Smollett's Legal Drama Eclipses the Rest of His Story (Column)

    Like so many other stories these days, the Jussie Smollett legal saga seemed governed not by coherent logic, but by chaos, and, in its absence of narrative, invites any observer to find in it the story they prefer hearing. Smollett, the “Empire” star who had been in legal jeopardy due to allegations of staging a [...]

  • Contract Placeholder Business WGA ATA Agent

    Writers Guild Plans for Agency Pact Expiration: 'There Will Be Difficult Moments'

    Leaders of the Writers Guild of America have sent members contingency plans for the possible expiration of its agency franchise agreement on April 7 — and admitted that it may be a rocky road. Members received the letter Tuesday from the guild’s negotiating committee as the WGA and agents were about the hold their seventh [...]

More From Our Brands

Access exclusive content