In an earnings call, Les Moonves, president/chief executive officer of CBS, says: “I expect by next year’s upfront more than 75% of deals will be C7. It’s a more accurate way of counting people who are watching our shows.” C7 is the average commercial ratings plus seven days of time-shifted viewing. The dominant advertising standard for many networks is the C3 ratings measure.
With regard to the just-completed upfront market, Moonves says, CBS had many upfront C7 deals with advertisers, and C7 deals pulled in more overall advertising revenue for TV networks. He didn’t go into specifics, but said: “C7 was a major part of our negotiations... C7 deals will shortly become the only measurement of relevance.”
For the second-quarter reporting period, CBS revenues dropped 5% to $3.19 billion from $3.37 billion for the second quarter -- suffering somewhat from key semifinal NCAA Tournament games that were aired on Turner Broadcasting networks during the period versus those games airing on the CBS Television Network in 2013.
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CBS also had lower content licensing revenues -- especially from international business. Operating income grew 10% to $801 million versus $730 million with net income dipping 3% to $418 million versus $435 million.
Total CBS advertising revenue was down 7% to $1.64 billion, with content licensing/distribution revenue off 9% to $903 million. Affiliate/subscriptions fees grew 7% to $586 million.
CBS TV stations' revenues were down 6% to $665 million, primarily from softness in the advertising market. TV stations were also affected by the absence of NCAA semifinals. Moonves says next year’s big political campaigns will ramp up TV advertising revenues for TV stations.
CBS’ cable networks were $516 million -- virtually identical to $518 million in the second quarter of 2013, due to lower international content licensing revenues.
Publishing revenues climbed 12% to $211 million from higher print book and digital sales. A quarter of of publishing sales now come from digital sales.
Although upfront advertising was “down slightly,” Moonves said CBS “will be happy to have the extra inventory to sell in scatter.” Still, he says CBS pulled in more upfront TV advertising dollars than any other network, as well as posting the highest cost per thousand viewer (CPM) prices.
While scatter pacing has been weaker for many TV networks in the first half of the year, Moonves says pacing has accelerated in the upcoming third quarter and anticipates the same in the fourth quarter.
CBS’ stock closed down 1.3% to $53.90.