Cablevision Sees Ad Sales As Important Revenue Driver
With some $300 billion in ad messages spent in the U.S. per year, and with Cablevision reaching a 4% U.S. consumer footprint with its services, there is a potential for some $12 billion to $15 billion in ad sales, according to Tom Rutledge, COO of Cablevision Systems, speaking at the Bank of America 2007 Media, Telecommunications and Entertainment Conference yesterday.
Cablevision pulls in around $250 million a year from advertising sales--or 6%--of its total revenues.
"Who else reaches almost 70% of their universe [with its customers] with a full suite of video, data and voice services--yet is such an inconsequential part of the advertising mix?" he asks.
In the future, with two-way interactive video platforms, as well as Cablevision's Internet and voice services, Rutledge believes this will change. "We'll create opportunities that will fulfill the needs of business to reach our customers."
Rutledge said the triple-play part of the business is strong. "Selling has increase consistently in triple play," he said. Right now, the company's basic cable penetration is at 69%, its data services is at a 46% share and its voice services, a 26% share.
Cablevision's market share of the voice business has been rising at about 10 percentage points per year, and data services at around six percentage points per year.
Rutledge also said the $90 retail price tag of the triple-play package isn't expected to rise any time soon. The consumer churn rate for its triple-play service package is low when compared to consumers who buy separate Cablevision services.