What's New in the US Media Industry: Netflix, Comcast, and Disney

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Part 7
What's New in the US Media Industry: Netflix, Comcast, and Disney PART 7 OF 20

How the Senate’s Vote Could Affect Comcast

Lawmakers reverse landmark Obama-era rule

The US Senate recently voted to roll back a set of rules intended to place barriers in the way of ISPs (Internet service providers) such as Comcast (CMCSA). The regulations, which were passed under the Obama administration, required ISPs to obtain the consent of their customers before they could use their data for internal marketing or targeted advertising for third-party marketers.

These rules blunted the competitive edge of ISPs in the advertising market. ISPs protested the rules, while consumer privacy advocates and companies like Facebook (FB) and Google approved of the move. However, it’s their turn to complain as ISPs see renewed freedom coming their way.

How the Senate&#8217;s Vote Could Affect Comcast

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Advertising shifting to the Internet

For ISPs such as Comcast (CMCSA), Verizon (VZ), and AT&T (T), the Senate vote could open up space for them to generate more advertising revenues.

Total media ad spending in the US (SPY) was estimated to be $177.8 billion in 2014. According to eMarketer, this spending is forecast to increase to $234.3 billion by 2020, as shown in the chart above. However, global ad spending is shifting online, presenting a disadvantage to legacy media companies that are losing ad revenues to their digital rivals.

How Comcast can benefit

Comcast (CMCSA) could utilize the reversal of the rules to better understand the behavior of Internet users to deliver more relevant targeted ads. It can also create more popular content for its video and television operations. Comcast could use incremental ad revenues to enhance its network to deliver faster Internet speeds.

Legacy media companies are struggling with the loss of pay-TV subscribers to streaming video services such as Hulu and YouTube.


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