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Media companies benefit from higher network fees

Anick Jesdanun (via AP/ SMH) | May 2, 2013
Media companies benefited from higher fees for cable television networks such as TBS, Comedy Central and CNBC in the first three months of the year.

Although Comcast's cable networks business benefits from higher distribution fees, those fees mean higher costs for Comcast because the company is also the nation's largest provider of cable TV services to homes. But companies such as Comcast make up for that by charging consumers more on monthly bills. Comcast's cable TV subscribers paid an average of $3.40 more per month in the first quarter compared with the same period last year. Some of that increase is from upgrades to more expensive packages. Overall, net income rose 17 percent to $1.4 billion.

The quarter was mixed for studio production.

Time Warner said the Warner Bros. studio division was successful with television productions, including hits such as "Revolution" on NBC and "The Following" on Fox. But revenue at the studio fell 4 percent to $2.7 billion. Time Warner said "Gangster Squad" and "Jack the Giant Slayer" fell short of expectations in theaters and the company had fewer TV shows available for licensing abroad. Time Warner did benefit from the home releases of "Argo" and "The Hobbit: An Unexpected Journey" and from a new studio tour in London tied to the "Harry Potter" franchise.

Revenue at Viacom's Paramount Pictures studio business fell 20 percent to $941 million, largely because it's compared with a 2012 quarter that included proceeds from "Mission Impossible _ Ghost Protocol."

Comcast's movie unit did well. Revenue at the Universal Pictures studio increased 2 percent to $1.2 billion, thanks to "Les Miserables," "Identity Thief" and "Mama."

In broadcast television, Comcast's revenue fell more than 18 percent to $1.5 billion because the quarter last year included the Super Bowl on NBC. Excluding the Super Bowl, which was on CBS this year, revenue fell 5 percent. Comcast blamed lower prime-time ratings at NBC and lower revenue from content licensing.

CBS, meanwhile, said quarterly revenue exceeded $4 billion for the first time since its 2006 split from Viacom, thanks to an 8 percent increase in ad revenue driven by the Super Bowl. But CBS also credited higher distribution fees for CBS stations as well as cable networks such as Showtime and CBS Sports Network.

ABC and ESPN owner Walt Disney Co. and Fox owner News Corp. are scheduled to report results next week.

Revenue at Time Warner's magazine business fell 5 percent to $737 million, as subscription revenue fell 11 percent. Time Warner plans to spin off the Time Inc. business into a separate publicly traded company by the end of the year.

During a conference call with analysts, Time Warner CEO Jeff Bewkes said the spin-off should leave the company stronger as "the leading pure-play video content company in the world." Without Time Inc., he said, the company will get about 90 percent of profits from television, the cable networks and television production at Warner Bros.

 

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