CBS Interactive Display Revs Rise 19 Percent

As CBS and the other broadcast nets head into the heart of the upfront season, the ad recovery appears to be gaining momentum. The company’s revenues and profits were up by healthy amounts. But one of the clearest signs of a turnaround — and an indication that the expensive acquisition of Cnet was paying off — was in CBS Interactive, which saw display revenues gain 19 percent. Digital was strong elsewhere across CBS (NYSE: CBS). While publishing house Simon & Schuster was down 6 percent, digital revenues more than tripled, as sales of e-books, audio downloads and standalone apps increased came in at $12 million for the segment.

Aside from that tidbit, there were no specific mentions of Cnet or, since CBS doesn’t provide many more details on interactive revenues, which are included in the broader entertainment segment, which includes broadcast and the related films and distribution units. Even more than the economy in general, it was the Q1 broadcast of Super Bowl XLIV that boosted the entertainment segment up 15 percent to $2.08 billion in Q1. As for the upfront, CBS president and CEO Les Moonves said in a statement: “Network television is enjoying a robust scatter market, and with CBS in first place, we will be able to monetize what promises to be a very active upfront.”

Looking at TV, cable nets’ revenues, which includes the Showtime Networks, were up a respectable 8 percent to $368 million, while local broadcast, which as been weak the past few years, was up 18.6 percent to $605.5 million in Q1.

Retrans here to stay: As always, CBS executive chairman Sumner Redstone led off the call. Redstone, even more upbeat than usual, quickly handed the call to the man he identified as “my good friend, the incomparable” Moonves. After a general overview of how the economy has boosted the companies fortunes and sparked an ad recovery, Moonves then hit on another important revenue stream that the company plans to pursue aggressively. “Retrans is a reality,” Moonves. “The financial model of broadcasting is being greatly improved. We now stand to earn north of $100 million in retrans fees this year and multiples of that in the coming years.”

Vague on CNN talks: Moonves didn’t shed more much light than what Time Warner (NYSE: TWX) CEO Jeff Bewkes provided earlier on talks about a content sharing deal with CNN. “We’ve been talking with CNN for years and we’re always looking for ways to improve our business. We’ll continue to do that.”

— vs. Hulu: Typically, the CBS Interactive group does about “$600-plus million” and Q1 is typically the smallest quarter of the calendar, said CFO Joe Ianniello. Sports and tech are the two big revenue drivers for interactive. Moonves then weighed in on a question about why CBS’s is not a part of Hulu. “We felt owning 100 percent of our advertising is a lot better than owning only 70 percent. In addition, selling it ourselves has been very effective. We think we have a model that works in a non-exclusive manner. Frankly, I don’t know what Hulu’s numbers are, but it appears they’re going to be adding a subscription model. One doesn’t know how effective Hulu-for-free has been. There have been some rumblings regarding dissatisfaction among some of the partners.”

iPad, interesting… but: The call ended with a question about Moonves’ feelings about Apple’s iPad. Moonves called the device’s relationship to content “very interesting,” but that was about it for now. Overall, if there’s a way for CBS to make money from it, fine. But he’s in no mood to simply try it out for the hell of it. “Ten years ago, we got paid for our TV shows one way, but now we’re getting paid in a dozen ways, between all these forms of technology. As I said before, was the better bet for us. You can see some of our content on the iPad and we are exploring every possible means. Every content company is aware that we’re in a brave new world and it’s all experimentation.”