Thursday, February 13, 2014

CBS Reports Distribution Fees Pacing Profits

CBS Corp. reported a 20% increase in fourth-quarter profit, thanks to higher content licensing and distribution revenue, and projected it would quadruple revenue from cable and satellite fees over the next six years, according to Marketwatch.

CBS said it expects fees from cable and satellite providers to rise to $2 billion by 2020, up from $500 million last year. CBS previously had projected it would boost fees to $1 billion by 2017.

The higher projection follows last year's bitter battle with Time Warner Cable Inc. over carriage fees. CBS was widely seen as besting TWC in that fight. Analysts have said CBS won a big increase in its fees.

CBS Chief Executive Leslie Moonves said the new projection would hold up regardless of the outcome of a legal battle under way between broadcasters, including CBS, and Aereo Inc. The online video outlet streams local stations' signals over the Web for a monthly fee, without the permission of broadcasters. CBS and other broadcasters have sued for copyright infringement and the Supreme Court is scheduled to hear arguments on April 22. Aereo argues its service facilitates consumers' legal right to receive over-the-air TV broadcasts for free.

Moonves said on an earnings conference call that CBS is confident of victory in the Supreme Court. He also said the company has a "host of compelling business alternatives" if Aereo wins. Those could include CBS launching its own streaming offering or ceasing over-the-air broadcasts and delivering its programming like a cable TV network.

CBS posted a profit of $470 million, or 76 cents a share, up from $393 million, or 60 cents a share, a year earlier. Revenue rose 5.8% to $3.91 billion. Investors cheered the news, sending shares 4% higher in after-hours trading Wednesday. Meanwhile CBS said it would speed up an existing stock-buyback program, repurchasing $2 billion of stock in the current quarter.

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