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Recently, CBS Corporation (CBS - Analyst Report) – a diversified media conglomerate – declared that it has entered into a non-exclusive, multi-year licensing agreement with Hulu, in order to telecast CBS’s television library content on the Hulu Plus subscription services. The financial terms of the deal were undisclosed.

CBS Corp has always shown it eagerness to add diverse revenue streams to hedge against economic cycles and its agreement with Hulu is in sync with this strategy. The CBS content will start featuring on Hulu Plus subscription services from the beginning of calendar year 2013.

Moreover, over the coming months in 2013, Hulu Plus subscribers will be able to enjoy more than 2,600 episodes from CBS library series of ‘Medium,’ ‘Numb3rs’ and ‘CSI: Miami,’ along with classics such as ‘Star Trek,’ ‘I Love Lucy’ and ‘The Twilight Zone.’

Additionally, the company said that the clips from ‘Entertainment Tonight’ will be accessible on Hulu and Hulu Plus on the day of its telecast. A sorted collection of CBS library will also be accessible on the free Hulu.com services.

Management at CBS Corp believes that this agreement has opened up avenues for earning additional revenue going forward. Moreover, the agreement is believed to demonstrate the strong demand for CBS’s rich library content.

Earlier, CBS Corp entered into a licensing agreement with Hulu for CBS-produced programming, which is telecasted on ‘The CW’ and for CBS content on Hulu's subscription services in Japan.

Conclusion

With an aim to add diverse revenue streams to its portfolio, CBS Corp recently expanded into the fastest growing live gaming and eSports market. Through CBS Interactive – one of its divisions – the company has entered into a partnership with TwitchTV – a leading video game broadcasting network– and Major League Gaming – the world's most renowned eSports league.

We believe CBS is well positioned to drive growth in the coming quarters through its strategic initiatives and operating efficiencies. Management remains optimistic and expects growth momentum to continue in fiscal 2012 based on reverse compensation from affiliates, strong demand of its content and online video streaming, retransmission consent, and political advertising.

The media industry remains highly competitive, and CBS Corporation faces intense competition from other broadcast radio and television stations; cable television networks; motion picture studios such as News Corporation (NWSA - Analyst Report). This may weigh upon the company’s results in the future.

We maintain our long-term Neutral stance on the stock, until a top-line growth is being witnessed by the company. CBS Corp carries a Zacks #3 Rank, implying short-term Hold rating for the next 1-3 months.

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