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Why CBS’s Publishing Business Looks Stable

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CBS’s Publishing segment in 3Q17

CBS (CBS) Publishing segment, which contributes nearly 7% of its total revenues, generated $228 million in revenues in 3Q17, which was 0.9% higher YoY (year-over-year). The segment also posted its highest revenues in the past six quarters in 3Q17.

The rise in this segment’s revenues was mainly due to a rise in print book sales and higher digital audio sales. In 3Q17, the top-selling titles included What Happened by Hillary Rodham Clinton and Sleeping Beauties by Stephen King and Owen King, and these contributed to the higher print book and digital audio sales.

From the graph above, you can see how CBS’s Publishing segment revenue growth remained stable over the past five quarters, with a CAGR (compound annual growth rate) of 0.2%.

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Stiff competition

In the first nine months of 2017, CBS’s Publishing segment grew nearly 7% YoY to $595 million, buoyed by growth in print book and digital audio sales. Despite the softness in the overall publishing industry, CBS has maintained stable growth for the past two years—a significant achievement for the company.

With the launch of Amazon’s (AMZN) Kindle and Barnes & Noble’s (BKS) Nook, the demand for printed books keeps slowing down. Meanwhile, the availability of Apple’s (AAPL) iPad and other tablet devices has boosted the competition even further for print books. This competition and the threat of piracy have been somewhat mitigated at CBS by the launch of popular books and audio records.

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