Tags: CBS | broadening | reach | ads

CBS Broadening Reach as Ads Sales Climb

By    |   Tuesday, 03 April 2012 10:25 AM

CBS (CBS), the media company that owns the most-watched broadcast network in the United States, is broadening its reach abroad and to new digital media outlets, helping to lift profits as ad sales revenue is poised to climb.

Headquartered in New York, CBS is betting on proven series to boost viewership and ad revenue.

In March, it renewed 18 primetime series for the 2012-13 season, including hit dramas “Criminal Minds,” “Person of Interest” and “Hawaii Five-0,” reality programs “Undercover Boss” and “Survivor” and comedies such as “The Big Bang Theory.”

The company, which competes with the other major networks Comcast’s NBC, News Corp.’s Fox and Walt Disney’s ABC, also has locked in long-term deals for the airing of popular events and sports such as NFL pro football, college basketball and football, and the Grammy Awards for music.

The strategy helped the company boost revenue by 1 percent on the year to $14.25 billion in 2011. Net earnings from the continuing operations of its businesses, excluding asset sales and financial activities, was $1.3 billion, up 78 percent compared with the year-earlier level.

This year could be better. Analysts expect the U.S. presidential election in November to drive up political advertising even beyond levels during the 2008 election, while a rebound in the economy could increase ad spending, with the auto sector already starting to do so.

Digital deals

CBS is expanding its programming sales beyond its TV network with content licensing and distribution after a 6 percent year-on-year revenue increase in the business last year. Part of the effort is on selling programming for online viewing via Amazon and Netflix as well as over its over its wholly-owned CBS.com and TV.com websites. The latter two allow it to net 100 percent of the revenue.

Another push is abroad. CBS last year surpassed Time Warner’s Warner Bros. as the top distributor of U.S. drama series in Europe, led by sales of “CSI” and “NCIS” for primetime.

RBC Capital Markets analyst David Bank says he is bullish on CBS on an expected rise in political advertising, programming sales and online deals this year. In March, he upgraded the recommendation for the stock to top pick from outperform.

Of the 28 analysts followed by Thomson/First Call, five have strong buy recommendations on CBS and 16 have buys, with the rest holds.

The company is due to next report on May 1.

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