Moonves: CBS Revs, Retrans Fees Up, Cable Fees Rise 9%
CBS Corp. inched up in total revenue for its fourth quarter 2012 -- with ad revenues a major piece of that growth.
Revenues grew 2% to $3.7 billion, with net earnings growing 6% to $393 billion from $370 billion. There was a 3% climb in advertising coming from higher political advertising to its TV stations and general higher network advertising.
Advertising grew to $2.4 billion from $2.3 billion in the fourth quarter of 2011. CBS says it did well, despite the impact of programming preemptions for the presidential debates and election night coverage, where some retail advertisers may have temporarily gone elsewhere.
The advertising future looks promising, says CBS. "We should again lead the upfront market in terms of volume and pricing," says Les Moonves, president and CEO of CBS, in speaking during the earnings call.
Responding to one analyst question about details concerning the upfront, Moonves says: "I'm not going to give you a number, but I'm confident [CBS will do well]." He says this is in contrast to a year ago, when he told analysts CBS would get double-digit percentage hikes during the upfront and actually got 9%. The year before Moonves said the same thing, and CBS got 12% to 13%. Moonves added current scatter pricing is up in the "teens" percentage-wise versus upfront pricing set a year ago.
CBS says affiliate and
subscription fee revenues rose 9% for its cable networks. There was higher retrans revenues and fees from CBS Network affiliated television stations. Also, cable affiliate and subscription fees were
up to $505 million from $465 million. CBS says it is well on its way to pulling in $500 million per year in retrans revenues in 2013.
Content licensing and distribution revenues were down 7% to $704 million. CBS says this came primarily from the timing of streaming revenues. In the fourth quarter of 2011, CBS benefited from the initial streaming sale of The CW programming to Netflix and Hulu Plus.
This contributed to lackluster results for all its entertainment revenues in the fourth quarter of 2012, coming in at $1.98 billion from $1.99 million in the fourth quarter of 2011. Cable network revenues were up $438 million from $395 million, with publishing slipping to $215 million from $229 million. Local broadcasting moved up $787 million versus $721 million, due to higher political advertising.
Concerning its recent deal with Amazon, where CBS sold programming to the subscription VOD service (after four days of debut airing on CBS), Moonves says the network may not be as aggressive as other networks, more like it is "studying" the marketplace.
How much money does it earn from SVOD deals per year? Joe Ianniello, CFO of CBS Corp., said "it's in hundreds of millions of dollars. We haven't cracked a billion, but we are on our way."
As previously announced, CBS is in the process of converting its outdoor business in North America into a real estate investment trust. It has also started a plan to sell its outdoor advertising business in Europe and Asia, classified as "held-for-sale." Its results have been presented as a discontinued operations.
The remaining outdoor business, now called Outdoor Americas, was at $340 million in revenues for the period, virtually even with $342 million.