SAI has an overview of CBS’ earnings report: CBS - the most ad-dependent and US-focused of the big media companies - reported lower revenue at its TV, radio and publishing divisions, by division, revenues were:

Television: -4%
Radio: -10%
Outdoor: +7%
Publishing: -4%

CBS is a fantastic media company, really well positioned with excellent management and a sound strategy to tackle the challenges that traditional media face, but that’s not a very rosy outlook in the context that outdoors and online are growing but everything else is shrinking.

What exasperates the matter is that - to quote NBC’s Jeff Zucker - these companies are trading offline dollars for online pennies.

If I were a media company - I would be investing in a plethora of companies, leaving them independent, and then buying them before they explode and get too expensive.  To their credit, CBS is doing that.  News Corp. appears to adhere to the “we prefer to buy, not lease” mantra so they shun minority investments for full buyouts early on.

I covered this in “What the Math Suggests“.   The reason is simple: online video alone, for example, represents over $150B in untapped market capitalization… but not for old media.

As an entrepreneur, I would attest that

a) remaining privately funded,
b) getting a strategic investment from a media firm or
c) getting VC funding all have pros and cons…

but the easiest path to success is b) - no doubt… though you tend to limit exit options, and as such, cannot maximize payouts.  Mind you, who cares about a potential maximum payout if it is all theoretical.

Related:
- Understanding TV executives Angst and Envy
- Web Video Represents $150B market cap in 2011, but not for TV companies
- Digital Revenues are Never Incremental for Old Media
- Will TV companies face same fate at Print Companies?
- If You’re Old Media, What Would You Do?

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