Insight Cable

May 4, 2010 by Post Team 

Insight CableInsight Cable:As subscriber numbers, higher revenues per subscriber, and increased advertising helped Comcast expected by Wall Street.

The company grew by 12 percent of profits from a year earlier and revenue by 3.8% percent. Cash flow – the key measure of growth in the cable industry – also registered a growth – free cash flow up 38.1 percent in the quarter, thanks mainly to a fall of 20 percent in capital expenditures.

Clearly, these numbers show that Comcast is doing a good job competing in this crowded market, but also says a lot about the economy and media industry.

Good news for media giants – the Comcast ad revenue grew a whopping 24 percent last quarter, its first quarterly advertising growth from the first quarter of 2008. And it’s a pretty dramatic change over the prior year quarter. This bodes well for CBS, Disney, News Corp, Discovery and other companies that rely on broadcast and cable advertising revenue. (Note: Comcast hoping to acquire NBC Universal. Both CNBC and NBC Universal is owned by General Electric).

Roberts also made some good news hidden content value.

He said Comcast’s programming costs grew by 5 percent this quarter and the company expects programming costs to increase at a faster pace in coming quarters.

That is a challenge to Comcast’s management, but also a global recognition of the giants of the media will be able to squeeze higher payments for its waterways. This not only means higher payments for cable channels, but also broadcast networks, which have recently begun to ensure direct compensation for carriage by cable companies. (Some high-profile battles high risk – most recently between ABC and Time Warner Cable in front of the Oscar – indicates that cable companies will pay more to keep the popular programming on the air.

There are also some positive news on consumption – people are still willing to pay for entertainment.

More and more people are paying for a set of packages for Comcast.

Instead of cutting, cable and Internet services offer great value at this time: 29 percent of Comcast subscribers using its three services (voice, Internet and video) from only 25 percent from a year ago. And the average Comcast customers are paying 6 percent more per month. In the earnings report Roberts discussed the increase in pay-per-view revenue, which comes from an increase in digital decoders. The message: give people set top boxes and * will * pay for video on demand.

Check out an interview CEO Brian Roberts‘ on Squawk Box this morning. He gave a good explanation of why the free cash flow is a key metric for the cable industry, and 82 000 to lose video customers in the quarter, is surprisingly good.


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