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“High margin revenue” largely stemming from older content licensed to distribution channels like Netflix has resulted in nearly doubled profit for CBS in the second quarter, CEO Les Moonves has confirmed.
Much of the gains were derived solely from older content that became a new moneymaker when released in digital spaces. The strategy “to squeeze as much money as possible from its vault of TV shows” including Cheers, Star Trek, I Love Lucy and Frasier has paid off, and in February, the company announced a partnership with Netflix expected to generate $100 million a year for two years, the term of the contract.
Moonves commented on the strategy during a conference call yesterday:
“Across every key financial metric, we turned in a stellar performance… At the heart of all this success is great content.”
Q2 earnings for CBS clocked in at $395 million, up over $150 million during the same period last year, making a strong financial case for distribution over digital channels and diversifying content offerings. Following the announcements, stock in CBS showed an uptick after the bell.
