Upbeat cable outlook good for Comcast (CMCA), CBS (CBS), Verizon (VZ) & JDSU
By Yaser Anwar of Equity Investment Ideas
According to a study released on the cable network executives expect a rebound this year for the industry. Kagan Research, which surveyed more than 100 cable networks, predicts revenue for the industry will reach $33.8 billion, a 13.1% increase over last year.
The growth will be driven by ad revenue holding steady in the double-digit growth range, the study says. Kagan sees such challenges looming ahead as license fee increases between 2%-5% annually for networks owned and operated by conglomerates and the shuffling of channel lineups by satellite and land-based cable operators if license fees are deemed excessive in light of a networks' ratings.
Kagan Research senior vp Derek Baine reflected on the networks' recent performance in a statement Monday: "Most major cable networks (revenue) has been growing at a rapid clip. ... ESPN took in $3.7 billion in 2005, $2.1 billion more than its nearest competitor. Nickelodeon, TNT, FSN, MTV and USA all topped $1 billion in revenue, while 10 other networks had revenue greater than $500 million."
This upbeat outlook for cable industry bodes well for stocks like Comcast & CBS, both of which have been beefing up their cable & fiber-optic networks to meet increasing demand not only from consmers but telephone companies such as Verizon (Verizon itself has been expanding its fiber optic networks to offer broadband phone services). A derivative play of the fiber optic networks would be JDSU & Brocade.
Sources of first three points: Hollywood Reporter & Kagan Research
http://equityinvestmentideas.blogspot.com/
According to a study released on the cable network executives expect a rebound this year for the industry. Kagan Research, which surveyed more than 100 cable networks, predicts revenue for the industry will reach $33.8 billion, a 13.1% increase over last year.
The growth will be driven by ad revenue holding steady in the double-digit growth range, the study says. Kagan sees such challenges looming ahead as license fee increases between 2%-5% annually for networks owned and operated by conglomerates and the shuffling of channel lineups by satellite and land-based cable operators if license fees are deemed excessive in light of a networks' ratings.
Kagan Research senior vp Derek Baine reflected on the networks' recent performance in a statement Monday: "Most major cable networks (revenue) has been growing at a rapid clip. ... ESPN took in $3.7 billion in 2005, $2.1 billion more than its nearest competitor. Nickelodeon, TNT, FSN, MTV and USA all topped $1 billion in revenue, while 10 other networks had revenue greater than $500 million."
This upbeat outlook for cable industry bodes well for stocks like Comcast & CBS, both of which have been beefing up their cable & fiber-optic networks to meet increasing demand not only from consmers but telephone companies such as Verizon (Verizon itself has been expanding its fiber optic networks to offer broadband phone services). A derivative play of the fiber optic networks would be JDSU & Brocade.
Sources of first three points: Hollywood Reporter & Kagan Research
http://equityinvestmentideas.blogspot.com/
posted by douglas mcintyre at 5:10 PM
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