CBS Leverages Premium Subscriptions for Record Q1 Revenue
Company reports $3.76 billion in revenue, a 13 percent increase.
CBS Corp. (NYSE: CBS.A and CBS) is leveraging premium subscriptions for record first quarter revenue of $3.76 billion, a 13 percent from revenue of $3.34 billion during the first quarter of 2017. This includes subscriptions to CBS All Access and Showtime OTT, over-the-top TV services that provide subscribers with ad-free streaming TV shows and movies, including original and exclusive programming like Star Trek Discovery and The Good Fight.
‘CBS's phenomenal first-quarter results once again affirm that we have the right strategy to successfully monetize our premium content now and in the future," said Leslie Moonves, CBS chairman and CEO, in a news release. ‘We achieved these record results thanks to the many ways we are delivering our must-have content, including our direct-to-consumer services-CBS All Access and Showtime OTT-which continue to grow rapidly and are now contributing meaningful dollars to our bottom line while attracting younger viewers.’
‘We are just beginning to reap the benefits from our position as an industry leader in delivering content over-the-top while others are just entering this business. Beyond direct-to-consumer, our company-wide growth in paying subscribers is an extremely important and unique part of our success. Specifically, when you combine our CBS and Showtime subs across traditional MVPDs, virtual MVPDs (aka "skinny bundles"), and direct-to-consumer services, CBS Corporation's subscribers are not only growing, but the growth is also accelerating,’ Moonves added.
Other highlights for the quarter include:
- Entertainment revenue of $2.72 billion, a 16 percent increase year over year, made up the bulk of the company’s revenue for the quarter.
- Affiliate and subscription revenue, which is part of entertainment revenue, was $979 million, or 26 percent of total income. This was a 39 percent increase.
- Content licensing and distribution revenues were up 18 percent.
- Advertising revenue grew 8 percent, including CBS’s acquisition of Network Ten in Q4 2017.
- Operating income was $772 million, a 6 percent increase, including merger-and-acquisition related costs of $9 million
- Net earnings from continuing operations for Q1 2018 were $511 million, or $1.32 per share, a 13 percent increase over the same period last year.
- Adjusted net earnings were $518 million, of $1.34 per share, a 17 percent increase year-over-year.
On May 2, the day before financials were released, CBS common stock was valued at $48.99 per share on the New York Stock Exchange. On May 3, stock had dipped to $48.74 before spiking on May 4 at $53.17 per share. As of 4:48 p.m. yesterday, CBS was valued at $52.32 per share. That’s still a decent increase over last week. By comparison, however, on May 11, 2017, CBS stock was valued at $62.75, so it has seen some fluctuations over the last year.
CBS consistently posts solid financials. It is not a surprise that investors are impressed. While affiliate and subscription fees only represent 26 percent of total revenue, CBS has really nailed over-the-top television, seeing big success with both CBS All Access and Showtime OTT. By offering ad-free experiences and exclusive programming, subscribers can get a wide array of entertainment (10,000+ episodes, live TV and original programming on CBS All access) for $9.99 a month (commercial free) or $5.99 a month (with limited commercials). This is less than most other services. It looks like CBS is in a position to have a strong 2018.