What Does Comcast Expect from Its Advertising Business?

Comcast at the advertising upfronts

According to a Variety report citing unknown sources on June 14, 2017, Comcast’s (CMCSA) NBCUniversal, Fox Networks Group (FOXA), and The Walt Disney Company’s (DIS) ABC network are making progress in their discussions with advertisers regarding advertising sales and ad upfronts.

What Does Comcast Expect from Its Advertising Business?

According to the report, CBS (CBS) and Comcast’s NBCUniversal have sought a rate increase in the “low double-digit percentage range” CPM (cost per thousand) for the sale of its prime-time ad inventory. CPM is a metric that’s used in advertising. It indicates the cost of reaching 1,000 viewers for advertisers.

Citing unknown sources, the report also states that Fox Networks Group and The Walt Disney Company’s ABC are asking for a CPM rate hike in the “high-single-digit percentage range.”

Comcast was asked about its advertising business at the JPMorgan Chase (JPM) Tech, Media and Telecom Conference last month. The company said that it continued to be optimistic about its advertising business. It also said that while its digital advertising business continued to see growth, its television advertising business was also thriving.

The company pointed out that considering the strength of its programming across its networks and that it will be broadcasting the Winter Olympics and the Super Bowl in 2018, it’s positioned well in terms of advertising.

Comcast’s view of the advertising market

Comcast stated at the JPMorgan Chase conference that when it comes to the national advertising market, it continues to benefit from a rise in CPM rates for television advertising even after a fall in its program ratings.

Comcast also expects local advertising to be strong as its owned and operated stations at NBC continue to deliver in terms of their programming.

As the chart above indicates, advertising made up 58% of Comcast’s NBC network’s $2.2 billion in total revenue in 1Q17.