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LONDON — Comcast remains “very optimistic” about the financial upside of NBCUniversal, including from ratings and retransmission consent fee revenue at NBC and Spanish-language arm Telemundo, CFO Michael Angelakis said here Tuesday.
Speaking at the Bank of America Merrill Lynch 2013 Global Telecom & Media Conference, he also said NBCUniversal remains confident that content companies would prevail in their litigation against Aereo, which provides over-the-air TV programming online and is funded by the likes of Barry Diller, and Dish’s Autohop, which allows users to skip commercials in primetime shows a few days after the show aired.
“Technology here is somewhat short-sighted” and is about “stealing signals and not paying for content,” he said. “We are confident that this litigation will prevail.”
Asked if NBCUniversal could move its broadcast network to a cable-style model the same way News Corp. president Chase Carey recently threatened Fox could do if Aereo prevailed in court, Angelakis said: “I don’t want to talk about how business models may change.” But he predicted that “great content will ultimately get monetized.”
Asked about various parts of NBCUniversal’s business, Angelakis said Tuesday that Telemundo currently does not have “very material profitability,” arguing there was much opportunity to boost operating cash flow via retrans money, ratings gains and advertising growth.
Discussing the NBC network, Angelakis argued that it has “real upside” as it has “underperformed substantially for a number of years.” He once again cited better programming that leads to higher ratings, which in turn boost ad rates, as a key focus area for management. “We think we are making progress on that,” he said.
Angelakis also reiterated that Comcast expects NBC to bring in $200 million-plus in retransmission consent fees this year, up from just below $40 million in 2012 and a minuscule amount in 2011 when Comcast acquired a 51 percent stake in NBCUniversal. With 75 percent of NBCUniversal’s carriage agreements with pay TV operators coming up over the next four years, that figure will continue to “grow exponentially,” he added.
Meanwhile, NBCUniversal’s theme parks have been doing “a phenomenal job” and have “more upside,” Angelakis told the conference.
Asked about the film business, he said, “We have made real progress … in the construction of the slate” with more sequels and animation projects now a key part of the studio’s planning. That has yielded success over the past six to nine months, he said, pointing to the current box office run of Fast & Furious 6 and the upcoming Despicable Me 2. NBCUniversal’s film strategy is all “about mitigating risks and constructing the slate,” Angelakis said.
Asked about the Comcast cable operations and rising programming cost pressures on pay TV firms, Angelakis said Comcast bought NBCUniversal to take advantage of that, while Comcast will be fine and manage through any challenges. But he also said that the company has “a number of nice tailwinds,” including broadening content rights and continued growth opportunities in broadband subscribers.
Asked about the rising number of online content providers, Angelakis said they will put to use Comcast’s broadband network, which is good for the company. He also cited the increasing competition in the space and rising programming costs in raising questions about new players’ business models.
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