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What Drives Comcast’s Programming and Non-Programming Costs?

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Comcast’s programming expenses

Comcast’s (CMCSA) programming expenses continued to rise in fiscal 2Q17, with year-over-year growth of 12%. The growth in programming expenses was driven by the renewal of programming contracts. The company expects this trend to continue in the second half of this year. However, after fiscal 2017, Comcast expects its programming costs to decline to “high single digits.” Comcast is also experiencing higher programming costs as a result of higher retransmission consent fees and rising sports programming expenses.

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Bidding for sports broadcasting rights is expensive. However, media companies are in a race to acquire these sports broadcasting rights, as live sports continues to be extremely popular among viewers. The popularity of live sports also means that it attracts more advertisers, which means higher advertising revenue for the company.

Comcast’s non-programming expenses

Comcast’s non-programming costs rose 1.4% year-over-year in fiscal 2Q17. In fiscal 2017, Comcast expects flat non-programming expenses. The company has achieved lower non-programming expenses through effective cost management. Comcast is also investing in improving its customers’ experience. In the next part of this series, we’ll look at Comcast’s capex outlook and financial metrics.

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