Cable and Internet companies are changing the broadcast business but CBS remains so optimistic it increased its prediction of re-transmission profits it expects for 2020, regardless of whether Aereo wins a U.S. Supreme Court case that could allow it to re-transmit CBS programming for free.
Aereo re-transmits a network TV signal onto a wireless device or computer, and for $8 a month users can watch or record programs. Aereo pays no re-transmission fees for using the signals, which violates copyright law, according to a lawsuit filed by broadcasters, ABC, Inc. v. Aereo, that the Supreme Court will hear arguments about on April 22.
During an earnings report conference call on Wednesday CBS CEO Leslie Moonves said the company will collect approximately $2 billion in re-transmission fees from cable providers, an increase from a previous company estimate that the broadcaster would collect $1 billion in fees by 2017. In response to a question from analysts, Moonves said that profit would not be impacted if Aereo won its Supreme Court case.
CBS supports the lawsuit against Aereo and Moonves said he is confident the Supreme Court will rule against the online TV service, but he added “If that does not happen we are not going to be financially handicapped at all.”
The online TV service has won legal challenges from broadcast networks since launching in 2012. Cable companies are likely watching Aereo's case to determine whether they will also be able to retransmit a broadcast signal online without paying re-transmission fees to networks.
CBS reported a profit of $470 million in its fourth quarter earnings, up from $393 million for the same period a year ago. Revenue increased to $3.91 billion for the fourth quarter, compared with $3.7 billion during the same quarter a year ago.