CES Recap: Analysts Favor Time Warner and Dish Network
As the 2012 Consumers Electronics Show approaches its end, two Wall Street analysts have selected their favorites, which turned out to be the cable operator Time Warner Cable (NYSE:TWC), satellite TV firm Dish Network (NASDAQ:DISH) and cable networks owners, according to the Hollywood Reporter.
Here’s two tales from the words of Wells Fargo analyst Marci Ryvicker and Wunderlich Securities analyst Matthew Harrigan. These notes were written on Friday.
“We just attended the Consumer Electronics Show (CES) in Las Vegas, where we met with a variety of programmers, distributors, vendors and so-called “disruptors” to gauge the current state of the TV ecosystem. We come away incrementally positive on cable (specifically Time Warner Cable) and Dish.”
“Currently TV Everywhere is a retention tool more so than a revenue generator (recall that TV Everywhere is offered to an authenticated video subscriber at no additional charge). However, long-term focus is on incremental revenue and those we spoke with believe the business model will be ad-based versus subscription-based.”
While some startups believe TV’s future is an a la carte model, “none could describe a reasonable path to monetization.”
“We view these players as ‘noise’…TV Everywhere is gaining steam, which could alleviate sub losses in the near to medium term.”
She’s “more positive on cable’s position” in a changing TV landscape, TWC had the greatest presence. We view this as a positive change suggesting that TWC is on a faster pace of innovation than previously thought.
Ryvicker also saw Dish featuring different innovations.
“Most interesting to us is Dish Broadband, a Dish-branded high-speed data service.” It is targeting 10 million underserved or unserved U.S. households, according to Ryvicker and her “Bottom line: Dish comes out swinging, and we feel good about its relevance longer term.”
“We remain positive on entertainment and cable network stocks continuing into 2012, with momentum off the spate of year-end 2011 deals and January 2012 Consumer Electronic Show announcements, suggesting that advertising and affiliate pricing integrity will be preserved with the advent of mobile video and disciplined over-the-top models.”
Regarding tablets, CES showed a continuing “onslaught of Android tablets with Microsoft (NASDAQ:MSFT) Windows 8 tablets also in the queue. With tablet penetration already at 11 percent in the U.S. and the rabid popularity of HBO Go (NYSE:TWX) and other TV Everywhere services, episode viewing by authenticated users is a nice positive for networks and studios even as measurement and monetization develop.”