Serious buzz about multichannel video advertising

Sunday, November, 11 2012

At 5% of cable’s revenue, advertising slips behind business services

By: Stewart Schley Sunday, November, 11 2012

Cable’s large public companies made roughly 5% of their revenue from advertising sales in the latest three-month period, with significant fluctuations among the Big 5.

The group average came in at 5.3%, slightly above the 5.1% we tracked in Q2, attributable to a big influx of political ad dollars that sent advertising revenues up 22% year-over-year in Q3.

Comcast generated the largest share of cable revenue from advertising among the group, with 6.1% of its nearly $10 billion in Q3 revenue coming from advertising.

At the low end, advertising accounted for just 2.7% of revenue for Cablevision Systems Corp. That’s not a reflection on advertising performance so much as an indicator of Cablevision’s success on the subscription revenue front. With $154 in monthly average revenue per video customer, Cablevision leads the industry in producing subscription revenue per household.

One inflection point of note: Based on this year’s trend lines, 2012 should be the first year in which advertising sinks below business/commercial services as a revenue contributor for the industry at large. We’re basing that conclusion results from the largest two U.S. operators.

Comcast produced $1.74 billion in business services revenue through the first nine months of 2012, versus $1.64 million in advertising revenue. Last year for the full 12 months, Comcast’s advertising revenue outstripped business services revenue, at $2 billion versus $1.79 billion.

Time Warner Cable also has reported more revenue from business services than from advertising through the first nine months of 2012 (as it did for all of 2011). The numbers through September: business services $957 million, advertising $740 million.


Local cable ad revenues rose 22% in Q3 2012 (Nov. 2, 2012)

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