Speaker 1: I can't always be fun. People are watching CBS. It
Speaker 1: would appear, at least according to their earnings after the
Speaker 1: bell four point three percent rise in uh second quarter
Speaker 1: advertising sales. The stock right now after I was trading
Speaker 1: about point four percent rise. To talk with us more,
Speaker 1: to dig through those earnings, we have Gita Reaganathan, who
Speaker 1: is our technology and media analysts at Bloomberg Intelligence. So
Speaker 1: break this down for us. We have advertising sales rising
Speaker 1: while the rest of the industry seeing a pretty uh
Speaker 1: underwhelming or or dropping forecast. CBS bucking the trend here
Speaker 1: or or something something else going on. Yeah, um, so
Speaker 1: you know, as you mentioned, yes, media ad results so
Speaker 1: far have been pretty uninspiring, and what's been more concerning
Speaker 1: is that the outlook has been fairly deepd as well.
Speaker 1: CBS seems to have bucked that trend on the surface,
Speaker 1: but let's remember that they mainly got that advertising boost
Speaker 1: from the broadcast of the n C Double A UM
Speaker 1: Championship Games. They did not have that last year, so
Speaker 1: that really gave them a little bit of a bump.
Speaker 1: So it looks like on the surface of it, you know,
Speaker 1: ad results look good, but then if you dig a
Speaker 1: little deeper, um, you know, underlying trends still seem a
Speaker 1: little disconcerting. On a core AD trends, uh look like
Speaker 1: they were flat at best. So when when you look
Speaker 1: at these numbers, what do you think they've got your
Speaker 1: what you're basically saying, it's not a it's not a
Speaker 1: simple compass, not year over year because they've got a
Speaker 1: new business in there that's so profitable for them. Um,
Speaker 1: why was that so much more profitable for them? And
Speaker 1: they didn't have the game of course, but the expenses
Speaker 1: stay about the same. That's it's gonna be pretty expensive
Speaker 1: event to put on. Um. Right, So advertising trends, um,
Speaker 1: you know, are they've they've they've clearly been what what
Speaker 1: CBS has been doing is it's actually one of the
Speaker 1: most exposed advertising, but they've kind of tried to really
Speaker 1: diversify away from that, and in that process they've increased
Speaker 1: their exposure to all of these other non ad revenue
Speaker 1: streams which are very high margin. It's a great example
Speaker 1: of that is you know, retransmission and then what they
Speaker 1: have been really um, you know, touting, which has been
Speaker 1: digital sales with you know, over the top services. And
Speaker 1: if you look at those two line items, Um, you know,
Speaker 1: the sales there have been or the sales increases have
Speaker 1: been fairly spectacular. I mean they reported something like about
Speaker 1: at eight percent increase in affiliate and re transmission fees
Speaker 1: and really all of that coming from you know, their
Speaker 1: normal negotiations with the pay TV operators as well as
Speaker 1: with all of these new skinny bundles in you know,
Speaker 1: YouTube and Hulu and whatnot. So they're just making sure
Speaker 1: that they have great representation on all platforms and that
Speaker 1: and that they're getting paid for it. So Showtime again,
Speaker 1: so what they said today was, um, they expect to
Speaker 1: actually cross over four million subscribers. Then that's combined on
Speaker 1: both their Showtime and their CBS All Access O t
Speaker 1: T platforms at the end of the year. A big
Speaker 1: contributor to Showtime has been you know, the telecast of
Speaker 1: twin Peaks. Um, and with All Access, they really are
Speaker 1: hoping to get a boost with the Star Trek that
Speaker 1: that that's going to be exclusive on the online platform
Speaker 1: sometime in September as well as they're also offering you know,
Speaker 1: NFL content on their All Access platforms. So, um, you know,
Speaker 1: definitely the momentum in the digital part of the business
Speaker 1: seems to be fairly good. Um. The other the other
Speaker 1: big announcement from them was that they're actually trying to
Speaker 1: take this all access Um content global, So their first
Speaker 1: move is going to be into Canada. That they seem
Speaker 1: to be like almost following a Netflix type of you know,
Speaker 1: playbook here, um, taking it there first, kind of seeing
Speaker 1: how it goes, and then expanding it to more territory
Speaker 1: across the globe. I haven't seen have you seen? I
Speaker 1: haven't seen the numerous yet on that hue that I
Speaker 1: actually have not What sounds like we all got to
Speaker 1: get on the board. We can get someone else, markt
Speaker 1: you finish the radio shows so we can go watch
Speaker 1: twin peaks sumbs up. Uh, well, so speaking of so
Speaker 1: you said gains a lot from the n C Double
Speaker 1: A Finals. So looking at the headlines coming out of
Speaker 1: Less Moon, visus call and he said, CBS is rolling
Speaker 1: out of seven live streaming sports channel. That seems like
Speaker 1: an interesting tactic. I mean, kind of rubbing up there
Speaker 1: against ESPN, who is having its troubles of its own.
Speaker 1: I mean, how big of a part are our live
Speaker 1: sports for CBS. In other words, if we were to
Speaker 1: take that away, Uh, could c CBS still succeed with
Speaker 1: all these other different ventures it's going into. I mean,
Speaker 1: I mean, live sports is a big part of the
Speaker 1: equation for CBS. So you know, they have their NFL
Speaker 1: deal going up onto two. UM, they've blocked in that
Speaker 1: that deal and they and they've you know, they've they've
Speaker 1: really tried to expand our coverage as much as possible.
Speaker 1: So you know, they have the Thursday night games and whatnot.
Speaker 1: UM and UM, you know, so live sports is big.
Speaker 1: That's been a big feature of their UM, you know,
Speaker 1: retransmission deals. UM, that's been a big selling point for
Speaker 1: them with they're all access UM and so UM, you know,
Speaker 1: with the with the streaming, they've also made great strides,
Speaker 1: I would say, UM, and I think the industry generally
Speaker 1: agrees that they've made pretty great strides very quickly in
Speaker 1: terms of streaming UM. And so this this life sports
Speaker 1: only goes to further strength and that and if they're
Speaker 1: able to you know, um succeed, I mean that that
Speaker 1: only shows how um, you know, how fast they've been
Speaker 1: able to get onto this whole UM digital bundle in
Speaker 1: in a in a rapidly changing landscape. When I look
Speaker 1: at content licensing as for senator revenues and just doing
Speaker 1: a quick back namble the math, but it looks like
Speaker 1: it's gone from about thirty revenues a year ago to
Speaker 1: thirty three revenues. But the trend seems to be indicative
Speaker 1: of something. What am I seeing there? I mean is
Speaker 1: that is that again about better negotiations without one picking
Speaker 1: up their their local affiliates. Yes, exactly, core Um. So
Speaker 1: it's one thing is they're they're owning more and more
Speaker 1: of their content. So if you just heard less moon
Speaker 1: Bis right now on the call, he said of their
Speaker 1: prime time schedule in the fall is actually from their
Speaker 1: from their studio, from the CBS studios. And when they
Speaker 1: do that, when they own more and more of their content,
Speaker 1: what that means is that they're able to go out
Speaker 1: into the domestic marketplace, into the international marketplace and license
Speaker 1: out that revenue. So that's kind of been um their model.
Speaker 1: Um They've they've they're really relying more um Um in
Speaker 1: home for you know, their sister and a sister studio
Speaker 1: for for all of the shows, and that's kind of
Speaker 1: really bumping up that content licensing revenue. They're owning more
Speaker 1: and more of their schedule guitar just real quick. Do
Speaker 1: you think we're going to see CBS via commerce talk
Speaker 1: start against soon? I think so? I think so. Um.
Speaker 1: I mean we know that Viacom was going after a
Speaker 1: script in a pretty big way, but they lost out
Speaker 1: to Discovery. UM. I mean the media is else on
Speaker 1: the whole, are you know not not in a great place.
Speaker 1: So I think it's going to be incumbent on these
Speaker 1: smaller cable network operators, especially like a Viacom, like an
Speaker 1: AMC to go outner um. And I think the red
Speaker 1: Stone family is going to go ahead and once again
Speaker 1: push for this merger. Wow, the old murders never seemed
Speaker 1: to die. That seems to be the theme of the
Speaker 1: day was Sprints, Team Home or five. I'm CBS. Why
Speaker 1: not ke So great to have you as always, Keet
Speaker 1: Rocking Athen Bloomber Intelligence tech and media analysts on CBS
Speaker 1: This Bloomberg