The CFO touts "higher demand in the scatter market" as CEO Brian Roberts lauds NBCUniversal for continuing "to exceed our expectations" and says it will likely offer to sell TV station spectrum in an FCC wireless auction.
The broadcast TV unit of cable giant Comcast's entertainment arm NBCUniversal has been benefiting from stronger scatter, or non-upfront, advertising sales trends in the back-half of the year than in the first half, management said on Tuesday.
The comments came on the company's third-quarter earnings conference call after the entertainment company reported improved third-quarter financials, driven by growth in its film unit, which was boosted by box-office strength from the likes of Minions and Jurassic World.
"Advertising revenue increased 3 percent [in the company's broadcast TV unit in the third quarter] despite the difficult comparison created by one less NFL game this quarter compared to last year," Comcast CFO Michael Cavanagh said on the call. "The fact that we were still able to report modestly positive advertising growth speaks to the strong scatter market, with the third quarter trending better than the first half of the year. Importantly, this higher demand in the scatter market has continued into the fourth quarter."
Meanwhile, the company reiterated that its cable networks ad trends have been affected by weaker ratings at some networks.
On the call, Comcast chairman and CEO Brian Roberts also said that at NBCUniversal things "continue to exceed our expectations." He also lauded the studio unit's "terrific" third quarter and "terrific run" this year. He lauded the unit's record this year for global box office and its unprecedented three films in the year with worldwide box office of $1 billion.
He also lauded NBC's Blindspot as the highest-rated new fall TV show and NBC's position as the top summer network. He also called out the success of USA Network's Mr. Robot.
Explaining a recent decision to take a controlling stake in the Universal Studios Japan theme park, he said the company expected great rides and other offers and customer service to ensure "very strong performance."
Asked if the Japan deal was part of an international push, he highlighted the opportunity for a planned theme park in China and said "there were no owned assets outside of the U.S." when Comcast took over NBCUniversal, and the company was looking for such opportunities abroad. Beyond the Japan and China theme parks though, Roberts said there were currently no other international expansion plans.
Discussing Comcast's cable operations, Roberts said the company has deployed 1.5 million voice remote control.
Beyond 2015, the company expects programming costs to remain "elevated," Cavanagh said. He cited retransmission consent fees and the interest in more digital and on-demand rights as being among the key drivers of the trend.
"It's good to see others recognize the value" of the cable business, Comcast CEO Neil Smit said when asked about European telecom giant Altice's plan to acquire Cablevision Systems. He said there was "no meaningful difference" in terms of pay TV competition from AT&T's acquisition of satellite TV giant DirecTV.
Asked about wireless opportunities, Roberts said "wireless obviously is an important area," adding: "We are going to trial some things and test some things after we activate" a mobile virtual network operator deal with Verizon.
Asked about the upcoming FCC wireless spectrum auction, he said: “We’ve seen some of the opportunity for NBC [TV stations] at that part of the auction and it’s certainly something that we’re likely to participate in and beyond that we’re studying it and we always look at all of the options for the company." He later added: "At the NBC side, we intend to participate. On the cable side, it’s something we’ll continue to study.”
Stations in any such deals would sell spectrum they use to wireless broadband service providers.