Earlier this week CBS released its third quarter earnings report, where revenue was down, but net earnings from continuing operations and operating income were up, year-over-year. Sumner Redstone, executive chairman for CBS Corporation (NYSE: CBS.A and CBS), puts the quarter in the win column though.

“Thanks to the strength of our great content, CBS continues to have a winning hand. Les and his team are capitalizing on all of the opportunities before us, and I’m confident they are setting the Company up for continued, long-term growth,” Redstone said in the announcement.

President and CEO Leslie Moonves said he is pleased with the gains in network advertising, and expects 2016 to be a good year with the upcoming presidential election and the network’s broadcast of “Super Bowl 50” in February.

“Looking ahead, as viewers increasingly want to access and pay for content in new ways, we see continued increases in subscription revenue from our in-house over-the-top services at CBS and Showtime, as well as those from outside distribution partners. The good news is, no matter how quickly the industry changes – from big bundles to ‘skinny’ ones to a la carte – CBS is positioned to succeed,” Moonves said.

CBS launched CBS All Access, a subscription over-the-top (OTT) service, late last year. For $5.99 a month, subscribers can access more than 7,500 episodes of current CBS shows and long-time favorites on the Internet.

In June, CBS’s Showtime followed suit, offering an over-the-top version of the premium cable channel for $10.99 a month. With a $56 million gain in subscription and affiliate fees, this strategy seems to be working for CBS.

Other highlights from the Q3 report include:

• Revenue was $3.26 billion, compared to $3.37 billion, year-over year. The 3.3% drop was due to several factors including the nonrenewal of a sports contract, lower ad revenue and lower pay-per-view revenue.
• 9% increase in affiliate and subscription fees, including a 50% revenue increase from retransmission consent and CBS Television Network-affiliated television stations
• Entertainment (CBS Television Network, CBS Television Studios, CBS Global Distribution Group, CBS Interactive and CBS Films) and publishing (Simon & Schuster) revenues were up; cable networks (Showtime Networks, CBS Sports Network, and Smithsonian Networks) and local broadcasting (CBS television stations and CBS radio) revenues were down.
• Operating income was $753 million versus $746 million, year-over-year. CBS said the increase reflects growth in high-margin affiliate and subscription fee revenues that were offset by lower profits from TV licensing.
• Net earnings from continuing operations were $426 million, a 6.5% increase compared to $400 million, year-over-year.

CBS reported revenue, by type, for the third quarter as follows (numbers shown are in millions and reflect revenue for the three months ending September 30, 2015 and 2014, respectively:

The earnings report came a day after CBS announced it was developing a new “Star Trek” series set to debut on CBS All Access in January 2017, reported Variety. Variety also reported that “Star Trek” would debut on the company’s broadcast network, but would then only be available on CBS All Access.

“I’m confident this is going to be a world-class effort that will make all ‘Star Trek’ fans very proud,” said Moonves. “These are some of the most passionate fans in the world, and we can see millions of them joining All Access, where they can watch these new episodes wherever they want and whenever they want and on whatever device they want to use, which is increasingly consistent with how younger viewers are watching our shows.”

Insider Take:

With overall revenues down, CBS’s third quarter report was a bit lackluster, but CBS Corporation tempered this by reporting it a day after it announced the production of a new “Star Trek” series. The timing of the announcements was strategic. Given the same set of circumstances, we probably would have done the same thing…big media buzz one day, less-than-exciting earnings the next.

What’s more interesting is that CBS is experiencing success with its foray into the subscription model with CBS All Access and Showtime. It is the first of the major networks to test a subscription product, and by doing so, it has successfully straddled the world between cable loyalists and cord cutters. It is also capitalizing on that audience by creating exclusive content that is sure to be popular.

For such a large company, CBS seems to be relatively nimble and ready to adapt to the changing needs of TV viewers. NBC is next in line, creating SeeSo, a subscription comedy product. Aside from that, no other broadcast network seems to be copying CBS’s moves on a large scale. That leaves plenty of room for CBS to steal the show.