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CBS Eyes Licensing Current TV Series to SVOD

14 Feb, 2013 By: Erik Gruenwedel

CBS Corp. is re-evaluating its conservative strategy toward subscription video-on-demand services, licensing past seasons of current TV programming rather than just catalog fare.

The media company this week announced it would offer episodes from upcoming mid-summer mini-series “Under the Dome” on Amazon Prime Instant Video four days after their initial primetime broadcast.

“This was a unique opportunity to subsidize a summer serialized show in a whole new way,” CEO Les Moonves said in a Feb. 14 fiscal call with analysts. “For the first time, selling past seasons of certain current hit shows … can have a big financial upside. Streaming is becoming a very important revenue source for us.”

While offering no specifics on current shows earmarked for SVOD, Moonves said there exist select TV shows that fit “more appropriately” in the SVOD channel, and can “unlock a lot of money” — more than in traditional syndication. He said financing “Under the Dome” mandated securing incremental revenue streams.

The executive said CBS, similar to other networks, is studying the SVOD market intensely, opting to greenlight deals it would not have made two years ago.

“We’re studying the marketplace,” Moonves said. “To put on [“Under the Dome”] in the summer, we needed to do an exclusive deal with Amazon. It’s a brand-new [business] model for us.”

CBS, which doesn’t disclose revenue generated from SVOD license agreements, said it expects to exceed that figure this year based on deals already in place.

When pressed, CFO Joe Ianniello said the SVOD agreements amount to “hundreds of millions” of dollars a year, with a billion dollar threshold “well on the way.”

Meanwhile, CBS said its entertainment division posted fourth-quarter (ended Dec. 31) operating income of $280 million, up 19% from operating income of $235 million during the previous-year period.

Revenue for the segment, which includes CBS Television Network, CBS Television Studios, CBS Global Distribution Group, CBS Films and CBS Interactive, was $1.98 billion compared with revenue of $1.99 billion last year.

CBS said the slight dip in revenue was due to lower television license fee revenues as the fourth quarter of 2011 benefited from the initial streaming sale of The CW content to Netflix and Hulu Plus.

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