CBS to expand its streaming service globally
Broadcaster plans to begin its international push in Canada; profit falls but tops forecasts.
Venerable U.S. broadcaster CBS Corp. said it plans to expand its CBS All Access streaming service globally, beginning with Canada early next year.
CBS revealed its international ambitions Monday as part of an effort to further bolster its $5.99-a-month streaming service as a hedge against dramatic changes in viewer behavior.
“We are very aware of the international success that other streaming companies have had,” CBS Chief Executive Leslie Moonves told analysts Monday in a conference call, a reference to streaming giant Netflix. “We now see a huge opportunity for CBS to go direct-to-consumer on a much bigger scale worldwide.”
CBS’ second-quarter earnings blew past Wall Street’s expectations, with revenue up 9% to $3.3 billion compared with the year-earlier period. For the Aprilthrough-June quarter, CBS earned 14 cents a share, or $58 million, compared with 93 cents, or $423 million, a year earlier.
The lower earnings reflected a $365-million noncash charge related to the spinoff of its radio stations division to Entercom Communications Corp.
On an adjusted basis, CBS produced earnings of $1.04 a share, compared with analysts’ expectations of 98 cents, according to Thomson Reuters.
CBS’ shares closed Monday at $64.52, up 1.4%, or 90 cents — and climbed further in after-hours trading after earnings were announced.
The company, controlled by Sumner Redstone and his family, has been intent on successfully making the transition to digital distribution. When CBS first launched CBS All Access nearly three years ago, skeptics believed that few cordcutters and young viewers would pay $5.99 a month for a traditional TV network.
But CBS’ streaming service, combined with a standalone streaming offering for sister channel Showtime, should reach 4 million subscribers by year’s end, the company said.
CBS All Access has a deep trove of content. Rather than selling its upcoming “Star Trek” spinoff to a streaming service like Netflix or Amazon.com, the series will be exclusive to CBS All Access as a way to drive new subscriptions.
CBS also has been aggressive in securing streaming rights for sports properties, including CBS’ five NFL “Thursday Night Football” games in the upcoming season. As the competition for sports heats up, CBS said it would not be shy about bidding for sports rights.
Also Monday, CBS unveiled a hard-fought agreement to license its programming to AT&T’s streaming service, DirecTV Now. The Dallas phone giant had been struggling for nearly a year to negotiate a deal to include CBS — including the local feed of KCBS-TV Channel 2 — in the DirecTV Now streaming service, which launched late last year.
Terms of the pact were not disclosed.
The deal with AT&T means CBS is now part of all the major streaming services that offer live traditional channels, including Hulu and Google’s YouTube TV. CBS, however, is not on Dish Network’s Sling TV. In addition to live feeds for Channel 2 and Channel 9, DirecTV Now has rights to carry the CW network, co-owned by CBS, and the CBS Sports and Pop cable channels.
“WE ARE very aware of the international success that other streaming companies have had,” CBS chief Leslie Moonves said Monday. Above, Moonves in July.