CBS Corporation has reported a 9-percent gain in its second-quarter revenues to $3.3 billion, as the company has also unveiled plans to take its CBS All Access platform global.
Through a partnership with the CBS Interactive and CBS Studios International divisions, the digital subscription video-on-demand and live streaming service is set to launch initially in Canada in the first half of 2018, with other markets to follow. CBS All Access debuted in the U.S. in October 2014. The company had previously stated that by 2020 it would have 8 million subscribers combined for CBS All Access and Showtime’s direct-to-consumer products. Yesterday, CBS announced that it is ahead of that pace and will exceed more than 4 million subscribers combined by the end of 2017.
“CBS All Access is growing faster than we anticipated domestically, and now represents a whole new opportunity internationally as well,” said Leslie Moonves, the chairman and CEO of CBS Corporation. “By going direct-to-consumer around the world, we will facilitate new connections between the global audience and our industry-leading premium content. I look forward to introducing CBS All Access to Canada in early 2018, followed by a number of other markets in multiple continents around the world.”
Revenues for the second quarter increased 9 percent to $3.26 billion, with growth across all of the company’s significant revenue streams. Affiliate and subscription fee revenues were up 16 percent, driven by a 25 percent increase in retransmission revenues and fees from CBS Television Network affiliated stations, as well as growth from new initiatives, including the company’s digital subscription services. Advertising revenues were up 4 percent, led by the broadcast of the semifinals and finals of the NCAA Division I Men’s Basketball Championship on the CBS Television Network. Content licensing and distribution revenues benefited from a higher volume of television licensing sales and grew 12 percent, despite a difficult comparison to Q2 2016, which included the international sales of five Star Trek series. Net earnings for Q2 were $58 million, down from the $423 million posted a year ago. Earnings were impacted by a non-cash charge of $365 million on the CBS Radio division, which is being sold.
“CBS delivered outstanding second quarter results while continuing to take a number of steps to achieve our long-term financial goals,” said Moonves. “First, we had a terrific upfront with gains in pricing and volume, including more and more deals that better reflect how people are watching our programming on a delayed basis. In addition, we took significant steps during the quarter to grow our affiliate fees from both traditional and ‘skinny’ bundles. Retransmission consent and reverse compensation increased 25 percent in the second quarter. And we are now seeing the benefit of our recent skinny bundle deals with Google’s YouTube TV, Hulu, and fuboTV, and just today we announced that we will be part of DIRECTV NOW as well. At the same time, our in-house over-the-top subscription services, CBS All Access and Showtime OTT, continue to grow beyond our expectations and are on track to surpass a combined four million subscribers by the end of 2017. We are now gearing up to take the next strategic step with All Access by expanding it into the international marketplace, starting with Canada in the first half of 2018. Showtime also had a terrific quarter, led by the successful return of Twin Peaks, which boosted OTT subscriptions dramatically, and we continue to expand the Showtime brand overseas with new deals to license our entire portfolio in France, India, Taiwan, Hong Kong and others. So, 2017 is turning out to be a great year for the CBS Corporation even without the Super Bowl and political spending that we had in the prior year. And as we look ahead, we are positioned to have an even better year in 2018.”