Cable Technology Feature Article
Financial Reports Provide Unexpected Insight into Television Networks
By Steve Anderson, Contributing TMCnet Writer
While for the most part, many look to the ratings of television shows and television networks to determine the overall health of a network, there is also plenty of information to be had from financial reports that the networks are releasing. In fact, many unexpected results come out of said financials, especially some of those recently released by major networks.
One of the biggest points of the recently-released financial reports came July 31, when it was revealed that the Oprah Winfrey Network was not in the dire straits some had projected. In fact, based on the financials released, it's projected that OWN will be profitable by the second half of 2013. But Discovery Channel, who partially owns OWN as well as several other channels, says that net income for the second quarter rose 15 percent. Ad sales and subscription fees, as well as subscribers, went up, which is unusual given the growing numbers looking to get in on cable alternatives like Netflix and Hulu (News - Alert).
But Discovery wasn't the only one seeing gains; Time Warner came out August 1 with news of gains of four percent, mostly on the strength of higher rates paid by the cable providers--satellite included--to carry Time Warner (News - Alert) channels like CNN and TBS. CBS also saw gains of eight percent for its networks, which not only beat analysts' expectations but also happened despite the loss of advertising revenue and program rerun sales alike. August 7 brought Disney's (News - Alert) announcement that its television arms saw a three-percent hike. Even AMC projected big gains, though if it couldn't settle disputes with Dish Network, it would likely see those gains become losses.
The news wasn't good all over, though. Comcast (News - Alert), meanwhile, lost profits on the cable networks like Bravo and MSNBC, but NBC is doing better than expected, especially with the London Olympics, and no longer expects a big loss as a result. And Viacom (News - Alert) lost five percent revenue with a seven percent drop in United States advertising. News Corp, parent company of Fox, lost three percent on broadcast revenue, but gained 15 percent on cable.
The news is sufficiently mixed to make anyone wonder just what's going on here. With gains and decliners intermingling, and in some cases within each parent company, pointing to one side of the equation or the other will likely prove inadequate to provide an explanation. All that can conclusively be said is that the television industry in general is, in general, wildly unstable, and subject to constant ebb and flow within the industry itself. Deriving long-term trends from this will likely prove flawed, as the movement across the industry--at least for this time frame--is sufficiently erratic to make accurate trend forecasting difficult if not impossible.
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Edited by Rachel Ramsey