CBS: Interactive properties 'getting more significant'
CBS doesn't break out the revenue of its interactive properties, but it sure does talk about them a lot.
Ultimately, CBS sees its interactive business accounting for a little more than 5 percent of total revenue. CBS has a few significant properties like Sportsline, a few recent additions like Last.fm and a video distribution deal with a handful of companies including CNET. Here's what CBS CFO Fred Reynolds had to say about the network's interactive properties:
"(Interactive) is a very small part of our business, but growing very rapidly; growing in kind of the 50%, 60% range, anchored by SportsLine, which is actually a nice business. It's a nice, healthy size business. But we don't break it out separately.
As you know, and we've discussed this in the past, we're looking at some point in the future, whether it is next year we will, as we've added Last.fm and others, it is getting more significant. But right now, it is not a significant part. I think down the road, we would expect it to be 5%-plus of our overall revenues.
Again, starting with a $14 billion base of revenues, that would be a big business, and importantly, high margin business. These are very, very high margin businesses.
I'd love to see the breakdown and how much Sportsline dominates. After all, Sportsline used to be a public company on its own. CBS also spent a decent chunk of the call talking about Last.fm. This deal is a little sketchy to me, but here's what CEO Les Moonves had to say:
"We've also used a portion of our cash to make some attractive tuck-in acquisitions, focusing on areas that fit well with our existing strengths, whether it is music or sports, content or community, or all of the above. Most notable was our purchase of Last.fm, a global, community-based music discovery network with more than 20 million unique users and growing at a rapid rate. This transaction was completed during the quarter. Last.fm can potentially add a unique interactive extension to just about all of our existing properties. It's an innovative, well-run business with great management, whose central goal is to create communities around content."
That's high praise, but there had been questions about why CBS paid $280 million for Last.fm. Moonves sounded like he was wooed by the social networking thing.
Moonves added that social networking has the potential to drive revenue throughout the network. "We've begun the process through our audience network and through Last.fm of selling ads on the Internet," he said.
"We love the fact that our content is getting out there, that people are using our content in different ways, commenting on our content, exchanging information about it. We think that ultimately will help us not only get revenue, but get more and more eyeballs, and new eyeballs, watching our content across the board. So we're a big proponent of it and we think the future looks very bright for it."