CBS's (CBS) SHOWTIME 'Over-the-Top' News Not a Surprise, Wells Fargo Says

Wells Fargo analyst Marci Ryvicker weighed in on news CBS CBS (NYSE: CBS) announces the July launch of SHOWTIME as a stand-alone offering, saying it is not a surprise.

Earlier, CBS announced SHOWTIME will be offered over the internet as a stand-alone streaming service launching in early July, with Apple as its first partner. The launch of SHOWTIME will coincide with the new seasons of the critically-acclaimed, hit series RAY DONOVAN and MASTERS OF SEX, premiering on Sunday, July 12th. iPhone, iPad, iPod touch and Apple TV users will be able to subscribe to SHOWTIME as a stand-alone service on the SHOWTIME app anywhere in the U.S., for one monthly price ($10.99) to view on all Apple devices.

"The timing and partner shouldn't come as a surprise," Ryvicker said. "Management has alluded to an upcoming launch of a stand-alone Showtime offering on several investor calls - most recently the 5/7 earnings call when CEO Les Moonves said it ''will be announced soon'' - so most investors expected this announcement was around the corner. Furthermore, we don't think partnering up with Apple should come as much of a surprise either, as this is the same path HBO has taken for its own OTT offering (HBO Now) to market. The bigger challenge will be convincing other cable distributors to come on board, in our view, but HBO seems to be paving the road here with a deal recently announced with CVC - plus reports that HBO is in discussions with both VZ and Cox."

While note a surprise, the analyst said the news is an incremental positive for CBS as it targets the millions of broadband-only homes in the U.S. The firm maintianed an Outperform rating on the stock.

For an analyst ratings summary and ratings history on CBS click here. For more ratings news on CBS click here.

Shares of CBS closed at $61.65 yesterday.

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