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TV is Dying... Unless You're CBS

Deutsche Bank (XETRA: DBK) and Credit Suisse (NYSE: CS) just ignored the “TV is Dead” noise and recently upgraded their ratings on CBS. Not NBC, not FOX, not ABC. Just CBS (NYSE: CBS.) So, what’s got them excited about the network known for having older viewers and playing recycled procedurals six hours a day?

Higher ratings for their new shows are expected, for one. That might be hard to believe, considering they’re debuting a show starring Jane Lynch as an alcoholic guardian angel as well as a shameless Modern Family ripoff. Those sound like what our army interrogators might leave on loop to get people to give up information, not something to to air in prime time. Yet, I am not an ad buyer, and those who do buy ads expect big things from the new Fall season on CBS.

Furthermore, their premium offering, Showtime, is well respected and can bring in revenue as a part of cord cutting bundles even if their traditional service sees a decline. This positions them well for the future and is a big reason why Macquarie analysts just set a 55 dollar per share price target.

Having worked in the TV industry, I can safely say that CBS offers the highest financial upside for all of its hit shows. This is especially true if you have a multi camera sitcom (cheap to produce shows that tend to do very well overseas.) Analysts don’t care that most smart people consider CBS to be lowest common denominator drivel for those who are too lazy to switch the channel after they turn the TV on. CBS could be poised for a big year, so many experts are advocating to buy. Looks like their CEO, Les Moonves, could be adding to his estimated 270 million dollar fortune. 

Andrew Schrage
Editor-in-Chief at MoneyCrashers.com
You bring up some good points, and I think the major ones to hit on are that banks (in whatever shape or form) realize that CBS offers the biggest potential for financial gain than any of the other networks. Is their TV show lineup drivel? Could be. But look at things in this light – what are most hard-working Americans looking for after they come home from a hard day at the office? Some show where they need to pay attention to every plot twist and turn? I'd probably say no. They want brain candy that's easy on the mind and simple to follow along. Although it sounds contrived, it's probably one of the shrewdest strategies that CBS has taken on in quite some time, and likely to reap it some pretty dramatic financial benefits.