CBS’s first-quarter earnings were highlighted by a 13% rise in revenues and 8% rise in operating income, leading CEO Les Moonves to affirm that his company has the “right strategy to successfully monetize our premium content now and in the future.”
The comment reads as a slight jab toward current efforts to recombine CBS and Viacom into one company, roughly 12 years after they initially split. While remerger negotiations are ongoing, the companies are reportedly still held up on Viacom’s valuation and the leadership structure of the combined company.
But Moonves made no direct mention of the remerger efforts in his earnings statement, instead focusing on how CBS’ OTT strategy is driving subscriber and revenue growth.
"We achieved these record results thanks to the many ways we are delivering our must-have content, including our direct-to-consumer services—CBS All Access and Showtime OTT—which continue to grow rapidly and are now contributing meaningful dollars to our bottom line while attracting younger viewers,” said Moonves in a statement. “We are just beginning to reap the benefits from our position as an industry leader in delivering content over-the-top while others are just entering this business.”
Moonves said that combined subscriber growth for CBS and Showtime is accelerating across traditional MVPDs, virtual MVPDs and direct-to-consumer services.
CBS’ revenues for the first quarter totaled $3.76 billion, up from $3.34 billion in the year-ago quarter. The company said that affiliate and subscription fee revenues were up 16%, thanks to 25% higher retransmission revenues and fees from CBS Television Network affiliated stations as well as growth from digital initiatives. Content licensing and distribution revenues were also up 18%.
Operating income for the quarter totaled $772 million, up from $726 million in the year-ago quarter. The company attributed the growth to higher revenues but said it was offset somewhat by higher programming costs.
Entertainment revenues of $2.72 billion were up 16% and cable networks revenues of $609 million were up 12%. Local media revenues stayed mostly flat, up just 1% to $415 million.