Comcast Thanks Netflix for the Sweet Cash
While a lot of publicity and discussion has been centered on video streaming giant Netflix’s (NASDAQ:NFLX) foray into the world of original programming, including the recently premiered show Lilyhammer, one only has to look at the recent earnings report from Comcast (NASDAQ:CMCSA) to see that it’s still spending a lot for network reruns.
According to Comcast, which owns the NBC network, the broadcast unit earned about $305 million extra in licensing fees last year as part of an “agreement for prior season and library content.” Comcast didn’t specify, but that agreement was likely the multi-year deal the company inked with the video provider back in July that gave Netflix subscribers access to older episodes of shows like 30 Rock, The Office, and Parenthood.
While $305 million isn’t much compared to Comcast’s overall revenue, which totaled about $55.8 billion in 2011, it’s still a decent boost to the company, considering it monetizes something that’s already earned its money elsewhere. Also given that the NBC’s revenues fell last year to $6.4 billion, a seven percent drop, it only helps that division’s bottom line (it should be stated, though, that NBC was coming off an Olympic year in 2010, where ad revenues were understandably elevated).
Here’s how these stocks are reacting to the news:
Netflix, Inc. (NASDAQ:NFLX): NFLX shares recently traded at $123.91, up $0.84, or 0.68%. They have traded in a 52-week range of $62.37 to $304.79. Volume today was 4,083,814 shares versus a 3-month average volume of 8,749,300 shares. The company’s trailing P/E is 29.02, while trailing earnings are $4.26 per share.
Comcast Corporation (NASDAQ:CMCSA): CMCSA shares recently traded at $28.67, up $1.42, or 5.21%. They have traded in a 52-week range of $19.19 to $27.52. Volume today was 25,561,548 shares versus a 3-month average volume of 15,348,700 shares. The company’s trailing P/E is 20.58, while trailing earnings are $1.39 per share.
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