Traditional and new pay TV companies have seen average advertising revenues per user tick up slightly through the first half of this year -- with the hope that future advanced advertising can show stronger gains.
MoffettNathanson Research says the current average for the entire business -- cable, satellite, telco, virtual -- is in the $8 to $9 range.
Comcast Corp.’s cable systems are at $8.82 per month for user, followed by AT&T (satellite, telco) with $8.20, Charter at $7.55 and Cable One with $4.42.
A year ago, in the first three months of the year, Comcast was at roughly $8.50/month, followed by Charter at $7.25 and AT&T with $6.00.
Typically, all operators witness a bump in the fourth quarter -- partly due to higher political advertising and sporting events. For example, Comcast and Charter average monthly revenue per user was in the $11- to $13-a-month range in the fourth quarter of 2018 -- when the high ad-producing midterm elections occurred.
While Altice USA posts the highest current advertising per user number at $10.63 (it was near $16.00 in the fourth quarter of 2018), MoffettNathanson cautions this includes the company's revenue from its own TV news network programming -- not just local cable spot advertising.
The promise for all these companies for advertising revenue is to find growth in targeting advertising, says Michael Nathanson, senior research analyst at MoffettNathanson Research: “The model essentially is to break even on content costs and make it up in advanced advertising.”
That hasn’t been the case for the virtual multichannel video program distributor fuboTV, due to higher program/content expenses.
While fuboTV has seen a bump in the first quarter of 2020 to $5 for the average advertising revenue per user versus $4 for all of 2019, the company has been taking on massive, eye-opening losses.
The company had a $171.8 million operating loss last year, on yearly revenues of $146.5 million. “Yes, that is correct,” says Nathanson. It had $201 million in “subscriber-related expenses.”