Communications companies milking their basic cable nets


A new report of revenue results in the latest round of reporting from big communications companies shows that basic cable services are among the best profit centers in their portfolios, thanks to their dual revenue stream of advertising and affiliation fees.

A MarketWatch story on a report noted that a fairly long list of companies, including Time Warner Inc., Walt Disney Co., NBC Universal, Cablevision’s  Rainbow Media, Scripps Networks, Viacom and News Corp., had positive results from basic cable holdings impacting their bottom lines.

The affiliate fees pulled in by top cable networks help them ride out slumps in the advertising market.
Ownership of the big four broadcast networks is accounted for in this group, and the same four have an interest in actual local broadcast television stations either directly or through related companies.

RBR-TVBR observation: Basic cable used to be mostly fees with some advertising income, and broadcast was all advertising. But both services have been moving in the same direction to a dual income stream. Broadcast has some catching up to do on the retransmission side, but since the most popular programming still resides on broadcast, affiliation and retransmission fee parity should not be an unthinkable concept.