CBS All Access Had Record Sign Ups on Grammys Sunday
Revenue during the conglomerate's fourth quarter dropped less than 2 percent to $3.52 billion.
More people signed up for CBS All Access on the Sunday of the Grammys than any other day thus far in the streaming service's more than two years of operations, CBS Corp. CEO Leslie Moonves said Wednesday during a call with investors.
The over-the-top offering, which CBS launched in 2014, also saw its best quarter yet during the fourth quarter of 2016 and its best month in January.
CBS reported subscriber numbers for All Access and sister service Showtime last summer, revealing at the time that both services had about 1 million subscribers. The company did not provide an updated number on Wednesday, but COO Joe Ianniello did say that the company's goal of 8 million subscribers between the two services by 2020 "may have been too conservative."
The performance of these services was a bright spot in the company's fourth-quarter performance. The TV conglomerate grew adjusted earnings to $1.11 per share, beating Wall Street's expectations. But it missed on revenue, which declined less than 2 percent to $3.52 billion during the quarter partly as a result of having three fewer Thursday Night Football games during the period.
Moonves addressed the declines in NFL ratings at the start of the season, noting that ratings improved by the end of the season after the election. "Clearly this has been a hot-button issue across the industry," he added. "NFL is the premiere property in all of media, and we feel very good about our long-term partnership."
For the full year, adjusted earnings grew 24 percent to $4.11 per share and revenue was up 4 percent to $13.17 billion. Moonves called 2016 "a phenomenal year" for the company, adding that he "couldn't be more excited about our growth prospects in the years ahead."
The TV conglomerate entered the end of 2016 after a vigorous third quarter, in which strong political advertising revenue helped it grow earnings and revenue.
For the fourth quarter, CBS recorded a one-time settlement charge of $211 million on its employee pension, which resulted operating income dropping to $484 million.
Revenue at the company's entertainment division, which includes the TV network, studios, CBS Interactive and CBS Films, decreased 3 percent to $2.39 billion. Affiliate and subscriber fees were up 28 percent led by higher affiliate fees and growth at CBS All Access.
CBS has the No. 1 comedy on TV, The Big Bang Theory, and Moonves was quick to confirm on the investor call that the network is "very, very close" to renewing the show for two more years.
The cable networks segment, which includes Showtime, was down nearly 11 percent to $501 million during the quarter because the same period in 2015 was boosted by a multiyear international licensing deal.
The local media segment grew revenue by 16 percent to $526 million. Simon & Schuster saw decreased revenue 10 percent to $209 million.
Moonves announced on the company's investor call that CBS has struck a new deal with Verizon's FiOS that covers CBS, The CW, Showtime and other cable networks.
Back in November, when it last reported earnings, CBS was still weighing a possible merger with Viacom, which shares Sumner Redstone as its chairman emeritus. But speculation about such a deal was put to rest after Redstone's National Amusements, the companies' controlling shareholder, withdrew its merger proposal.
CBS stock closed the day flat at $65.25. The stock was unchanged during afterhours trading.