Comcast CFO Talks NBCUniversal’s ‘Monetization Gap,’ Universal’s Changes

Comcast’s costs are rising as it acquires sports and other content, but it doesn’t plan on slowing down any time soon, its CFO said Tuesday. That’s because it intends to secure a wide range of rights to that content, including VOD, SVOD, Internet streaming and more.

“We have more content rights than anybody,” Michael Angelakis told the audience of the Goldman Sachs 22^nd Annual Communacopia Conference in New York,

“Programming costs are a challenge,” he said. “We can manage the cable business and absorb those rights costs with (stable) margins.”

On the flip side, NBCUniversal is still experiencing a “monetization gap” with its content, and Angelakis looks at that as a multiyear fix. In 2011, when Comcast took full ownership, NBC was collecting just $4 million a year in retransmission fees, while this year it will collect about $200 million — though that still lags the competition, Angelakis added.

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CPMs are also growing as NBC tries to make the case that, by some metrics, it is the No. 2 broadcast network, he said.

Angelakis also spoke of “structural challenges” on the film side, lamenting still the decline in DVD sales.

To minimize risk and maximize potential, Universal is focusing on building a better slate, which includes more animation with partner Illumination (Despicable Me 2, The Lorax) and more franchise movies, like the Fast & Furious series.

He said Universal is already seeing results, as it is up to about $100 million this year so far in cash flow while last year it logged roughly a negative $70 million.

He also said bringing in Jeff Shell to run studio operations is a big move, as well, given his experience as chairman of NBCU International.

“International is obviously a much bigger component of the film business,” Angelakis said.

He said that while housing starts are ticking higher and vacancy rates are falling, “it’s still a little bit early” for those improvements to cause meaningful Comcast subscription additions.