CBS cites Netflix, Amazon streaming deals in 163% profit surge for 2Q

Netflix (Nasdaq: NFLX) and Amazon (Nasdaq: AMZN) made it onto center stage during CBS's second quarter earnings call this afternoon, with the broadcasting network's Chief Executive Leslie Moonves saying the company's revenue from deals with the video streaming company, as well as other digital content deals, grew 21 percent.

Overall, CBS reported income of $395 million, or 58 cents a share, 163 percent higher than the $150 million, or 22 cents a share, it reported a year ago. Revenues were up 8 percent to $3.6 billion.

Moonves said the company built on the Netflix deal it signed in the first quarter with its licensing agreement with Amazon last month, "another example of how we are capitalizing on the value of our content by selling it to new distributors without taking away from established revenue streams."

Moonves also praised the network's deal with Netflix International, selling it streaming rights in Latin America and Canada.

"International expansion is a key strategic growth area for our company, and this deal represents a significant step in that process," he said, noting that Netflix is no longer the only game in town for content providers looking to license more programming.

"We did a significant deal with Amazon, which is becoming big and Dish [Network] just announced today that they are going to spend a considerable amount of money buying content and buying libraries," Moonves said. "What we like to say about both Amazon and Netflix, none of the things that we sold are currently shows that are on the air. So, the world is getting bigger everyday and expanding, and we hear about Apple wanting to buy content and Google, et cetera, et cetera, and Microsoft. So, we think having the content we have is going to get bigger and bigger."

CBS EVP and CFO Joseph Ianniello, meanwhile, said the deals the network was doing with companies like Netflix and Amazon were high margin, in the range of 50 percent plus.

"We're feeling pretty good, you know, about that," he said. "The Netflix International (deal) is gravy. We want to put gravy, we want to put some cream, we want to put cherries on the top of all that stuff, so stay tuned for more of that."

For more:
- see this earnings call transcript from Morningstar
- see this Wall Street Journal article

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