SNL Kagan Affiliate Fees 2016 – Sports TV Ratings

New ViacomCBS Sees Growth In D2C, Content Production And Advanced Advertising

Touting strength as a bigger
traditional TV-media company, the new ViacomCBS now claims the largest TV audience of any TV-media company, as well as $8 billion in national TV advertising revenue.
But the main initial
growth focus of the new company — which will have a combined annual revenue of $28.2 billion through its all-stock deal — will be in streaming direct-to-consumer
businesses.
In a phone call with media analysts, Viacom senior executive Bob Bakish, who will be president-CEO of ViacomCBS, says: “The first part of our strategy is accelerating
growth of our D2C [direct-to-consumer] offering... subscription and ad-supported offerings.” This includes CBS All Access, Showtime, Pluto TV, as well as Nickelodeon’s Noggin and the
forthcoming BET+.
Secondly, Bakish says the company will focus on TV, movie and content production and advanced advertising.
“We will be the first stop for advertisers and their
agencies in the U.S. because of the audience we deliver... including addressable, branded content, influencer marketing and experiential,” he says.
“Advertising will be an area of
significant growth,” says Joe Ianniello, CBS senior executive, who will be chairman-CEO of CBS. Advanced advertising, he says, will rise due to its now larger combined TV audience.
For
example, Viacom says it will command a 22% share of all prime-time TV viewers — the largest of any U.S. media company. The nearest competitor is Comcast Corp. with 18%; Walt Disney and Fox each
have 14%; Discovery, 11%; WarnerMedia, 8%; and collectively for others, 13%. Data comes from Nielsen's live program-plus-seven days of time-shifted viewing and SNL Kagan.
As a signal to
growing demand on TV content, especially for new streaming services, ViacomCBS says it collectively has spent $13 billion in TV-movie content production — which rivals that of other big
media companies, including Disney, Netflix, Comcast and others.
Globally, ViacomCBS has 750 TV series in production and distribution in 180 countries.
Viacom notes there is room
to grow in retransmission/affiliate fees versus its viewership share — retrans/affiliate revenue at an 11% share; TV viewership at 22%. “There is a significant revenue upside we
should be going after,” says Ianniello.
The board of the combined company will have 13 members — six independent members from the CBS board and four from the Viacom board.
Shari Redstone, president of National Amusements, will be chair of the board of the new company.
CBS will be the acquiring company, with its shareholders owning 61% of the combined
ViacomCBS; Viacom will own 39%. National Amusements will own 79.4% of the company’s voting Class A shares.
The company expects to close its deal by the end of 2019. ViacomCBS says it
expects $500 million in cost-saving synergies. Analysts say this would include company layoffs.
Todd Juenger, media analyst of Bernstein Research, has concerns: “The company will invest
the synergies in pursuit of some version of a D2C product, which we don’t believe would have meaningful consumer appeal. This investment (in new original content, foregone licensing,
cannibalization) would wipe out the synergies.”
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Aside from affiliate fees, SNL Kagan estimates that the flagship network’s net advertising revenue will exceed $2.1 billion in 2015 and is projected to increase to as much as $2.2 billion in SNL Kagan shows reverse retrans payments back to the networks growing to 50% of affiliates' retrans payments over time, even as affiliates' monthly fees increase in the coming years. About SNL Kagan SNL Kagan, a division of SNL Financial LC, is a comprehensive resource for financial intelligence in the media The average $1.32 retrans fee that SNL Kagan anticipates in 2017 places TV stations above all but five basic cable networks in terms of affiliate fees per subscriber per month. But as the chart above shows, according to a report from the National Association of Broadcasters (citing research from SNL Kagan), the year-over-year growth in retransmission fees is expected to The average $1.32 retrans fee that SNL Kagan anticipate the industry will receive by 2017 across all markets and all affiliates puts TV stations above all but five basic cable networks in terms of affiliate fees per sub per month, with networks such as ESPN ($7.72) and TNT ($1.92) all still above that average mark.

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