The major upside for CBS, in Morgan Stanley's view, could result from international syndication, which is "a growth sector for the media industry, and CBS -- both from a content-quality perspective and as a potential earnings driver -- is most exposed."
The recent deal with Netflix, whose streaming subscriber base accounted for more than a third of its quarterly net-subscription additions, is a two-year non-exclusive licensing agreement, allowing Netflix to stream select shows from CBS's library, including currents like Medium and classics like Cheers.
The financial terms of the deal haven't been disclosed, but it is undoubtedly a lucrative move for both parties as much of the content covered, particularly hit classics, also encompassing Family Ties, Star Trek and The Andy Griffith Show, aren't getting playtime on-air, but are likely to attract viewers on the Web, benefitting both parties.
To see these stocks in action, visit the Morgan Stanley's Best Stock Ideas Portfolio on Stockpickr.
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