Morgan Stanley Reports CBS Monetizing TV Library Through Netflix Agreement

According to Morgan Stanley, CBS CBS likely garnered a higher per episode fee from TNT for Hawaii Five-O re-runs in exchange for agreeing not to make the show available to an online on-demand distributor such as Netflix. Morgan Stanley reported that CBS has already begun monetizing its TV library through a ~$200 mm Netflix agreement. “This syndication agreement highlights an indirect benefit from the emergence of new online video distribution models. CBS is most exposed to this direct and indirect revenue opportunity from online video, followed by TWX (through WBTV). TNT will be able to include these episodes as part of its authenticated “TV Everywhere” offering to cable/satellite customers. We see this deal as another data point highlighting the changing earnings mix at CBS as it derives a higher percentage of earnings from recurring revenue streams than ad sales.” CBS closed yesterday at $24.25.