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NEW YORK – The TV Everywhere industry initiative, which is making pay TV content available on more platforms, may have moved along with less speed than some had hoped.
But Needham & Co. analyst Laura Martin estimated in a report on Friday that it could add $12 billion in annual revenue to the U.S. TV ecosystem as it continues to be rolled out over the next 3-5 years.
“These dollars dwarf any near-term revenue streams from digital platforms (Hulu, YouTube etc),” she wrote. “Additionally, these are low risk dollars as adding services to the TV bundle suggests additional revenue rather than economic cannibalization.”
The largest publicly traded content owners could see the addition of approximately $10 billion per year of advertising revenue, or 12 percent of their total, Martin suggested. “Time Warner and Disney should be the biggest beneficiaries because they are the furthest ahead at rolling out TV Everywhere,” she wrote.
For pay TV operators, TV Everywhere could add approximately $1.7 billion per year of revenue, or an extra 2 percent, “owing to incremental pricing power driven by new services,” Martin said. She sees cable giants Comcast and Time Warner Cable as key beneficiaries “as they lead the industry in TV Everywhere adoption.”
Based on these projections, TV Everywhere could also add $24 billion-$48 billion in market value to the U.S. TV ecosystem, which currently is approximately $330 billion, over the next five years, Martin said.
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