Experts: CW-Hulu Deal Will Further Strengthen Network's Main Point Here After Recent Netflix Agreement

NY - The CW's second digital distribution deal from the month, this time around with Hulu carrying out a recent agreement with Netflix, will move the network further towards profitability for proprietors CBS Corp. and Time Warner, based on experts. "We estimate the agreement will lead about $15 million in annual revenue towards the CW and something cent in annual earnings per share impact to every CBS and TW within the agreement," Davenport & Co. analyst Michael Morris stated inside a note to traders. "Although this deal isn't massive, it mitigates deficits in the CW and reduces the danger profile for developing new content by supplying an incremental, consistent revenue stream." Searching in the Hulu deal, which provides coverage for current-season instances of such shows as Gossip Girl, in the CBS Corp. position, Wells Fargo analyst Marci Ryvicker also contended the "purchase of the CW is searching better and.Inch As the agreement is "not financially material," she stated: "More to the point, though, this really is one other way that CW can approach breakeven and ultimately achieve profitability, that is clearly great for CBS because it is the owner of 50 % from the network." Ryvicker informed traders though to not expect a CBS content cope with Hulu. "We don't believe that this [CW-Hulu deal] changes CBS' stance concerning the accessibility to CBS content on Hulu," she stated. Morris also considered exactly what the latest digital deal could mean for that content companies involved. "Time Warner makes a smaller amount of its original content open to digital platforms, but the organization's tone toward potentially creating contracts has softened in recent several weeks," he stated. Morris added that CBS continues to be "particularly active" in growing sales of their content across platforms, striking six deals in recent several weeks, including ones with Netflix domestic and Latin America, Amazon . com, Hulu Japan and CW/Netflix just before Friday's announcement. "We don't check this out like a precursor for any bigger deal between CBS and Hulu-CBS continues to be very measured with distribution of network content and attempt to generate high-margin revenue in the distribution window, that the CW content doesn't,Inch the analyst stated. Email: Georg.Szalai@thr.com Twitter: @georgszalai Related Subjects Time Warner CBS Corporation The CW Hulu