Streaming Deals (& Star Trek) Help Boost CBS Profits

As previously reported, during 2011, CBS has been cutting new streaming video deals with Netflix and Amazon, which include Star Trek content. Not only has this been a boon for Trek fans, but it appears to be a big money maker for CBS. This week the company reported their second quarter profits, which were up significantly and much of the gains were attributed to their new streaming video deals.


CBS making big money off library – including Star Trek

In 2005 CBS & Paramount stopped production on their last TV series, Star Trek: Enterprise. But since then they have of course continued to make money off Star Trek  through syndication and licensing, but in 2011 they are finding their library of TV shows (including Star Trek) are big money makers for digital distribution. This week CBS reported better than expected earnings, including revenues from content licensing of $889m for the three months ending June 30th (a 21% rise from last year). The increase is attributed to the new licensing deals with Amazon and Netflix and the biggest components of those deals was the catalog of five Star Trek TV series.

In an investors conference call this week CBS Chairman Les Moonves noted how shows like Star Trek, Cheers and I Love Lucy are helping "drive revenue and profit growth" for the company. Moonves went on to say about the CBS library:

At the heart of all the success is great content. Our content is performing extremely well and we are increasingly distributing it in the most profitable ways with new possibilities opening up all the time.

This use of the CBS library and Star Trek has got the notice of market watchers, here are some quotes following the earnings report:

Star Trek and I Love Lucy are making CBS an emerging winner in the media space.

Licensing deals with digital platforms like Netflix are allowing the Eye to generate new profits from vintage library fare such as "Cheers," "Star Trek" and "The Twilight Zone."

CBS reported a more than twofold increase in profit late Tuesday, its first earnings report to include early revenue from a deal it struck in February to give Netflix customers Internet access to older CBS TV
Wall Street Journal

Revenue from rerun sales and new online outlets increased 21 percent, the company said. signed an agreement with CBS to offer TV shows including “Num3ers” and “Medium” to the subscription service Amazon Prime, the companies said last month. CBS and Netflix announced an agreement in February for shows that include “Dexter” from the company’s Showtime cable network and the “Star Trek” TV series.

CBS also noted how their deals with Netflix and Amazon were non-exclusive, so more deals should be expected, plus they also emphasized the opportunities for foreign digital library sales as well. All of this adds up to the possibility of Star Trek appearing on more platforms and in more locations.

Star Trek library helping CBS boost profits via new digital distribution deals

Moonves also looked to the future, noting that while Star Trek and other shows were part of the libary of "old" content, CBS is still producing new content that will eventually flow into these digital deals.

We have a lot of old stuff and part of this — part of the Netflix and Amazon deal go back to original episodes of Star Trek and I Love Lucy, but they also include a show like Medium, which just went off the air this past year. What we’ve been able to do successfully is continue to replenish our library. We have 3 CSIs that are now on the air that aren’t part of these Netflix deals or the Amazon deals. One day, they will come off the air, and we will get a lot of money for those in those platforms. So the idea is our production companies, both at CBS as well as original production at Showtime, are going to continue to produce numerous revenue streams, and our library is astronomical.

It is likely that CBS will let Paramount continue to take the lead for new Star Trek content for another film or two, but it is good to see Star Trek contributing to the bottom line of its corporate parent. One can only hope the renewed interest in Star Trek both on the big screen and via these new digital deals will help convince CBS to consider creating new Star Trek content for its library in the future.

One encouraging sign is how CBS is now seriously considering remastering Star Trek: The Next Generation in HD. Such a project will require significant investment (more than the original series Star Trek Remastered project) and shows at least some renewed interest in Star Trek at CBS.


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