Syndication Market Grows, Gives CBS Revenue Boost

A growing syndication market could help CBS have big years in 2013 and 2014, according to a new report from analyst David Bank of RBC Capital Markets.

With shows including NCIS: LA and The Good Wife about to start generating syndication payments, CBS could generate $300 million of high-margin off-net revenue in 2013, Bank says.  CBS also has shows starting to cash in during 2014, including Hawaii Five-0 and Blue Bloods. Bank estimates the revenue they’ll generate is about $275 million.

News Corp. could also be a big syndication winner, with programs including Modern Family (which airs on ABC but is distributed by 20^th Television) and The Cleveland Show generating $200 million in revenue starting in 2013.

“Off-network syndication continues to be a key driver for our Large Cap Media coverage universe, leading to potentially large one-time bumps,” Bank says.

Bank estimates that the traditional U.S. syndication marketplace is about $20 billion and that the newer digital SVOD syndication market has already swelled to $2 billion for 2012, led by Netflix, which is spending about $1 billion itself.

“While the market has grown tremendously during these past few years (we estimate 2011 digital content spend was nearly $800 million), we believe it will continue to grow roughly 20-30% over the next several years as more digital SVOD players enter the space and more content deals are struck,” Bank says.