The decrease to $397 million was driven by lower political advertising sales. For the company overall, retrans revenue was up 27% and there were solid gains from OTT services.
CBS Corp. on Thursday afternoon reported results for the third quarter of 2017 that included Local Media segment revenue of $397 million, down 3% from $409 million in 3Q 2016.
Local Media operating income of $105 million represented a 14% decrease from $122 million in the year-ago period.
Leslie Moonves, CBS chairman-CEO, said: “Our solid third-quarter results demonstrate the way we are shifting our business to capitalize on changing viewing habits. To that point, during the quarter we saw dramatic growth in our affiliate and subscription fees, including revenue from traditional and skinny bundles as well as over-the-top viewing.
“Today we have more subscribers at CBS and at Showtime than we did a year ago, and best of all, newer digital platforms are resulting in more revenue per subscriber than traditional ones. So not only are we growing our subs, but we are growing our rates as well.
“Our over-the-top services had a particularly strong third quarter, thanks to the exciting launch of Star Trek: Discovery on CBS All Access and the Floyd Mayweather/Conor McGregor pay-per-view event on Showtime.
“Of course, premium content is also driving our success at the CBS Television Network, where we are once again No. 1 this season, with two of the top three new shows, including Young Sheldon, which premiered as the No. 1 show on television overall.
“In addition, for the first time, the majority of our upfront deals this fall are based on viewing over a seven day-period, which means that we are now beginning to monetize millions of viewers we were not getting credit for a year ago. So, from our new OTT services to the monetization of delayed viewing, and from our burgeoning international business to rapid increases in retrans and reverse comp, we are just beginning to capitalize on significant growth areas for the future.”
Entertainment segment revenues (which include CBS Television Network, CBS Television Studios, CBS Global Distribution Group, CBS Interactive and CBS Films) were $1.8 billion, down from $1.9 billion.
Cable Networks segment revenues totaled $840 million, up 40.5% from $598 million. Cable Networks operating income was $294 million, up from $285 million.
For the company overall, revenues increased 3% to $3.17 billion from $3.08 billion for the same prior-year period.
Affiliate and subscription fee revenues were up 52%, led by Showtime Networks’ distribution of the Floyd Mayweather/Conor McGregor pay-per-view boxing event, 27% higher retransmission revenues and fees from CBS Television Network affiliated stations, and growth from new digital initiatives, including the company’s owned streaming subscription services.
Content licensing and distribution revenues were down 22%, mainly due to the timing of domestic television licensing sales. Advertising revenues decreased 5%, driven by lower political advertising sales.
Operating income for the quarter decreased 2% to $707 million for the third quarter of 2017, which included lower-margin revenues from the pay-per-view boxing event, compared with $721 million for the third quarter of 2016, which included a larger volume of higher-margin political advertising and television licensing sales.
Net earnings from continuing operations for the third quarter of 2017 decreased 10% to $418 million from $466 million for the same quarter last year, mainly as a result of the lower operating income as well as a one-time tax benefit of $47 million in the third quarter of 2016.
Read the company’s report here.