CBS released its first-quarter financial results today and boasted an 11% increase in overall revenues and 71% annual growth in subscribers to its direct-to-consumer streaming video services.
Joe Ianniello, president and acting CEO at CBS, attributed the rise in profits and revenue in part to the Super Bowl and also to increases in affiliate and subscription fee revenues.
"At a time when others are losing subscribers, our total number of subs across traditional MVPDs, virtual MVPDs and our direct-to-consumer services once again grew strongly during the quarter,” said Ianniello in a statement. “In fact, our direct-to-consumer subs grew 71% from last year, and we are seeing strong growth here in the second quarter thanks to premium original series such as The Twilight Zone on CBS All Access and Billions on Showtime.”
In February, CBS announced that All Access and Showtime OTT had 8 million combined subscribers. The company also updated its growth projections for the services and estimated that together they will have 25 million subscribers by 2022. That figure does not include subscribers from CBS’s international streaming services or its ad-supported streaming channels.
While advertising, affiliate and subscription revenues rose, content licensing and distribution revenues fell 3% during the quarter. CBS said that decline was a result a renewal of a domestic licensing sale of “Dexter” during the year-ago quarter.
Operating income for the first quarter increased to $1.23 billion from $772 million but that big margin of growth was largely attributed to a gain of $549 million on the sale of CBS Television City. Adjusted operating income increased 2% to $793 million from $781 million, which was offset somewhat by increasing programming expenses and costs related to expanding the direct-to-consumer business.
CBS’s entertainment business – which includes CBS Television Network, CBS Television Studios, CBS Global Distribution Group, Network 10, CBS Interactive, CBS Sports Network and CBS Films – accounted for the bulk of the company’s revenue and operating income growth. In the meantime, CBS’s cable networks segment – which includes Showtime Networks, Pop and Smithsonian Networks – saw revenues decline 3% and operating income fall 26%. CBS attributed the decline to increased investment in programming and marketing costs for series premieres and to drive subscriber growth for the Showtime digital streaming subscription offering.