Wonder why CBS Corp. CEO Les Moonves isn't wild about Aereo Inc.? It has to do with the amount of the money his company makes from retransmission fees.
CBS posted a record first quarter Thursday, with revenues of US$4.04 billion.
While an 8 percent increase in advertising made up the bulk of that revenue, retrans fees -- the money paid by pay-TV operators to retransmit CBS shows -- also contributed a sizeable chunk of change.
Growth of 14 percent in affiliate and subscription fee revenue was reportedly "driven by 62% higher retransmission revenues and fees from CBS Television Network affiliated television stations as well as growth at Cable Networks."
For the quarter, CBS brought in $519 million for retrans and affiliate fees combined.
Unfortunately, CBS doesn't break out revenue from retrans fees specifically, but last summer Moonves noted that $250 million was a conservative estimate for quarterly retransmission revenue. Moonves has also said repeatedly that he expects the joint number for retrans and affiliate fees to hit $1 billion by 2017, if not before.
Meanwhile, Moonves, like other broadcast executives, has threatened to turn CBS into a cable network if Aereo isn't shut down in court. (See Free TV Model Under Threat.)
Aereo uses dime-sized antennas to capture free broadcast signals before transcoding and redistributing those signals over IP to subscribers. At a financial conference this week, Moonves stated that CBS could make the transition to a cable network "in a few days."
— Mari Silbey, Special to Light Reading Cable