Thanks, Netflix! You Too, Amazon! Why CBS Loves the Digital Rerun Business.
Another data point for the “digital can be a really good thing for big media” argument: CBS says one reason it just posted a very nice second quarter is because of a Netflix deal which brings it new money for old shows.
CBS, which saw revenues jump up 8 percent, said the increase was “driven by” a 21 percent increase in licensing and distributing dollars, “which benefited from a new licensing agreement for the digital streaming of select library titles.”
Translation: “That $200 million Netflix deal we announced back in February, which lets us resell stuff we’re no longer putting on the air, is kicking in and paying off.”
Again, this is the best-case digital scenario for Big Media titans like CBS: The one where technology doesn’t carve up their existing business, but gives them a chance to sell old stuff (in some cases, really old stuff, like the original “Star Trek”) “over and over again,” in the words of CEO Les Moonves during today’s earnings call.
Asked who else might be willing to pay up for his re-runs, Moonves got more effusive. “[Satellite TV operator] Dish just announced today that they’re going to spend a significant amount of money buying content and libraries,” he said, adding that “we hear about Apple wanting to buy content, and Google. Et cetera, et cetera. And Microsoft.”
A slightly less enthusiastic version of the same story comes from CBS’ book division at Simon & Schuster: Revenue dropped 3 percent, as a boom in digital sales couldn’t outweigh a drop in print revenue. But because digital sales are more profitable than print, earnings moved up 12 percent.