) announced last week that it will acquire Clicker Media, a guide
to Internet TV, and also appoint Clicker's CEO, Jim Lanzone, to
head CBS Interactive. CBS competes with other media
conglomerates like Disney (
), News Corp. (
), Time Warner (
) and Viacom (
). While this move looks like one to strengthen its position in
digital media, CBS could also position itself to better understand
consumer habits and use it to its own advantage. We take this
opportunity to look at Clicker's business, the importance to CBS
Interactive (the company's digital arm) and what CBS might be
thinking with this move.
Our price estimate for CBS is $26.34
, which is roughly a 10% premium to market price.
Clicker at a Glance
Clicker is an online TV guide for programming available on the
Internet. The site itself does not host any of the TV shows or
movies, instead it acts as an aggregator and directs user to other
sites like Hulu, NBC.com, iTunes, Amazon etc. which host these
shows. Clicker is quite new and was launched in 2009, and
definitely holds its importance given the surge in online video
viewing. According to
CBS' press release
, Clicker indexes about 1 million online TV shows and movies from
both free and paid services.
Clicker is going to be a part of CBS Interactive, which is a
group of Internet properties owned by CBS. Although financial terms
were not disclosed, we believe that any revenue contribution to the
company is likely to be limited in the foreseeable future. CBS
Interactive itself is a very small contributor of the stock while
containing multiple Internet properties.
CBS Interactive is Just 4% of CBS' stock
CBS Interactive includes sites like CNET.com, TV.com, CBS.com,
CBSSports.com, CBSNews.com and Gamespot.com. CNET is best known for
its service allowing users to download freeware and shareware
applications and news dedicated to the technology sector while
Gamespot.com is one of the best sites for video game news, reviews
and rankings. CBS.com and TV.com are focused on programming content
and CBSSports.com provides sports scores, news, statistics and
video programming related to sports. According to our estimates,
these multiple properties contribute just 4% to CBS' stock.
Although the growth is good, the
is low compared to other parts of the business.
What CBS May be Thinking?
CBS states in its press release:
"Clicker's products and proprietary technologies add
firepower to our existing portfolio of entertainment properties,
and if we can help grow Clicker to its full potential in the
years ahead, the strategic value could be tremendous."
What this strategic value might be?
Given that Clicker is a navigation tool, CBS could potentially
use its data to understand viewing habits on the web. This could be
used as a powerful tool to help sell more targeted ads for its
digital content, which could command a higher price than other ads.
This site could potentially serve as a predictive tool for its
content and programming businesses, which represent the lion share
of the company's value. By better understanding viewers' online
behavior, CBS can prioritize its shows, better direct its
advertising and select new content based on market trends.
the complete $26.43 Trefis price estimate for CBS'