Affiliate and subscription revenue overtook advertising sales as the biggest money-maker for CBS Corp. in the most recent quarter as the broadcaster ramps up its streaming offerings.
Affiliate and subscription fees, which include revenue from streaming services and traditional bundles, jumped 52% in the period, helped by sales of the pay-per-view boxing match between Floyd Mayweather and Conor McGregor, as well as subscriber growth at the company's streaming services.
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Traditional media companies such as CBS have increasingly turned to online platforms for growth. CBS has laid out plans for international expansion of its direct-to-consumer platform CBS "All Access" -- which charges subscribers $5.99 for access to a live stream of the network and a library of shows. The company has also said it is gearing up to launch online entertainment news and sports networks.
Analysts at Evercore Group LLC said CBS's streaming services have insulated the company from some of the impact of subscribers dropping their cable services. CBS has also benefited from offering its channels on virtual distributors such as Hulu Live.
"Newer digital platforms are resulting in more revenue per subscriber than traditional ones," Chief Executive Leslie Moonves said in a statement.
Advertising revenue fell 5% because of lower political spending than in the year-earlier quarter, which was during the presidential election. The most recent period also had one fewer Thursday Night Football game airing on the network than in the year-earlier quarter. Operating income fell 2% in part because of the decline in more-profitable political ads.
Content licensing and distribution revenue fell 22%.
Overall, CBS reported mixed results in the third quarter. Earnings rose to $592 million, or $1.46 per share from $478 million, or $1.07 per share a year earlier. On an adjusted basis the company reported earnings of $1.11. Revenue rose 2.8% to $3.17 billion.
Analysts polled by Thomson Reuters had forecast earnings of $1.07 per share on $3.26 billion in revenue.
Shares fell 2% to $53.40 in after-hours trading, adding to the 3.1% drop logged during Thursday trading.
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(END) Dow Jones Newswires
November 02, 2017 17:33 ET (21:33 GMT)