CBS Corp. continues to focus on diversifying its revenue streams to
lower dependency on traditional advertising revenues. These include
reverse compensation from affiliates, digital distribution, and
retransmission consent fees. At the same time, the company is
keeping up with changing trends and to cater to need of cord
cutters, it has launched two over-the-top channels. Moreover, it
will launch an independent streaming service for its premier
channel Showtime, somewhere in 2015. All these prompt us to upgrade
our recommendation on the stock to Neutral. However, rise in
programming costs and unfavorable currency fluctuations continue to
be concerns. Further, an unimpressive content licensing pipeline
for the next two quarters will result in tougher year over year
Based in New York, CBS Corporation (CBS) owns the top media
franchises. The company now reports under four broad segments
following the separation of its Outdoor Unit.
Entertainment Segment comprises CBS Television Network CBS
Television Studios, CBS Global distribution Group and CBS Films,
the producer and distributor of theatrical motion pictures and CBS
Interactive, which operates one of the leading online content
networks for information and entertainment and includes leading
brands, such as CNET, CBS.com, CBSSports.com, GameSpot, TV.com,
CBSNews.com, ZDNet, Last.fm, and MetroLyrics.com.
Cable Networks Segment comprises the premium subscription
program services, Showtime Networks the cable network focused on
college athletics and other sports CBS Sports Network and a venture
between Showtime Networks and Smithsonian Institution, Smithsonian
Publishing Segment comprises Simon & Schuster, which
publishes and distributes consumer books in printed, audio and
digital formats (audio downloads and electronic books) both
domestically and internationally under imprints such as Simon &
Schuster, Pocket Books, Scribner and Atria Books.
Local Broadcasting Segment comprises CBS Television Stations
consisting of 30 owned and operated TV stations, and CBS Radio,
consisting of 126 radio stations owned and operated in 27 U.S.
markets as of Feb 11, 2014.
On Jan 16, 2013, CBS Corporation announced its plan to convert
its CBS Outdoor operations in North America and South America into
a real estate investment trust ("REIT") and divest its Outdoor
businesses in Europe and Asia, which has been reflected as a
discontinued operation in the books as of Dec 31, 2012. The company
launched an IPO in the first quarter of 2014. Subsequently, CBS
divested 81% of its stake in the unit in Jul 2014, thereby
completing the split-off.
CBS Corp. was born out of Viacom when the latter split into two
publicly traded companies New Viacom and CBS Corporation on Dec 31,
2005. Each outstanding share of Viacom's common stock was converted
automatically into a right to receive half a share of New Viacom
common stock and one CBS common share. New Viacom retained MTV
Networks (MTV, VH1, Nickelodeon, Nick at Nite, Comedy Central, CMT:
Country Music Television, Spike TV, TV Land and many other networks
around the world), BET, Paramount Pictures, Paramount Home
Entertainment, and Famous Music.
CBS Corporation (CBS): Read the Full Research
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