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Strong Content Line-Up Expected to Boost Comcast’s Cable Networks

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Cable networks

Comcast’s (CMCSA) cable network business, part of the company’s NBCUniversal segment, may be set to gain in the upcoming quarters, driven by a strong content line-up. In the last five quarters, cable network revenue has fallen at a compound annual growth rate of -3%, mainly due to the Rio Olympics.

In 3Q17, cable networks generated $2.6 billion in revenue, down 11.6% year-over-year. This fall was mainly due to lower distribution and advertising revenue, and was slightly mitigated by higher content licensing and other revenue. However, excluding the $432 million in revenue the company earned from the broadcast of the Rio Olympics last year, cable network revenue grew 3.7% year-over-year in 3Q17.

A decrease in subscribers and lower viewership ratings also dragged down distribution and advertising revenue for cable networks. However, this decline was slightly mitigated by higher contractual rates, higher content licensing fees, and the timing of contract renewals.

Strong content expected to drive growth

Despite the impact of the Rio Olympics, cable networks may get a boost from upcoming shows. The launch of new shows such as Will & Grace, and existing content such as This Is Us and The Voice may boost ratings for the company.

NBC completed the season by placing first among primetime networks for a fourth consecutive year, winning by the widest margin of any network in six years. Moreover, it has strong sports content slated for 2018, starting with the Winter Olympics and Super Bowl in February and the FIFA (International Federation of Association Football) World Cup on Telemundo in June.

Such strong content may not only boost the company’s distribution and advertising revenue in 2018 but also help it compete with media and Internet TV peers such as CBS (CBS), Disney (DIS), and Netflix (NFLX).

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