Advertising outlook for Comcast
For media companies such as Time Warner (TWX) and Comcast (CMCSA), advertising is a key component of revenue. In its fiscal 4Q16 earnings call, Comcast stated that, as it continues to build on its advanced advertising capabilities, it continues to see strong growth. Comcast added that although it’s gained fewer advertising clients from the automobile industry recently, this could be a cyclical trend.
According to Comcast, its national advertising market continues to be strong, and after strong advertising upfronts last year, its scatter advertising market continues to be robust. Comcast expects advertising upfronts to remain firm this year.
As the above chart indicates, advertising made up 70% of the NBCUniversal Broadcast Television segment’s total revenue of $2.8 billion in fiscal 4Q16. This segment had advertising revenue of $1.9 billion in fiscal 4Q16.
At the Goldman Sachs 25th Annual Communacopia Brokers Conference last year, Comcast stated that it has a broad portfolio of channels in its Cable Networks segment, which resulted in strong advertising upfronts.
In an earlier earnings call, the company said that it was behind other companies in terms of advertising monetization. However, it has managed to close this gap by combining channels.
Time Warner’s advertising outlook
For Time Warner, in 1Q17, it expects advertising revenue at its Turner business division “to be flat to up low single digits.” The company also expects its international advertising revenue trends to improve in 1Q17, and it expects its news and sports programming to be key drivers of its advertising business.