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Digital Content Licensing Drives Revenue Growth at CBS

Streaming licenses for television series and other content arr proving increasingly lucrative for CBS Corp., with the media and entertainment company reporting a six percent rise in its content licensing and distribution revenues during 2011.

Content licensing and distribution revenues for CBS’s fiscal year ending Dec. 31, 2011 topped $3.25 billion, compared to $3.07 billion in 2010. The category also represents a growing percentage of the company’s total revenues, which rose by 1 percent from 2010 to $14.25 billion. Whereas content licensing and distribution accounted for 21.8 percent of corporate earnings in 2010, the category now represents 22.8 percent of revenues.

While advertising still accounts for a majority of earnings, CBS chief executive Leslie Moonves noted in a statement that the company’s revenue mix was becoming “more steady and recurring” thanks to content licensing, as well as growth in subscription fees and business models.

During a Feb. 15 earnings call with analysts, Moonves added that CBS may produce original content for Netflix, which has been a key contributor to the company’s licensing growth.

While Netflix is starting to offer more exclusive content to its streaming subscribers — echoing the business model of pay TV networks such as CBS’s own Showtime — Moonves said that CBS still views Netflix more as an opportunity than a threat. “Until they are doing 22 hours a week of premium content, we do not look at them as a competitor, but rather another place to put our content,” Moonves said (via Bloomberg).

Showtime posted growth in both its subscriber base and licensing fees for its original series in 2011, CBS reported.

Meanwhile, the digital transition is in full swing at CBS’s publishing unit, which includes Simon & Schuster. Publishing revenues for 2011 decreased by 1 percent year-over-year to $787 million, as growth in the sale of digital content — which more than doubled from 2010 — was offset by lower print book sales.

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