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Sunken ‘Battleship’ Underlines Q2 Loss for Universal

1 Aug, 2012 By: Erik Gruenwedel

Cable parent Comcast loses 176,000 video subscribers in the quarter

Universal Studios Aug. 1 reported a second-quarter (ended June 30) operating cash flow loss of $83 million compared with operating cash flow of $27 million during the previous-year period, primarily driven by the underperformance of theatrical release Battleship.

Revenue for the studio, which includes Universal Studios Home Entertainment, dipped less than 2% to $1.2 billion compared with $1.3 billion last year, primarily reflecting lower theatrical and stage plays revenue, and partially offset by higher content licensing revenue from subscription video-on-demand services, among others.

Meanwhile, parent Comcast Corp. reported it lost 176,000 video subscribers during the quarter to end the period with 22.1 million subs. The No. 1 cable operator lost 238,000 video subs during the previous-year period.

The video sub loss underscores ongoing trends among cable and satellite TV operators dealing with increased competition from telecommunications providers and so-called "cord-cutting" by consumers opting for less expensive over-the-top video services such as Netflix, Hulu and Amazon Prime.

In a call with analysts, Comcast Cable CEO Neil Smit said the reduction in video sub losses was the result of improved service calls, rollout of the cloud-based X1 DVR remote and related apps.

“I don’t think the competitive environment is materially changed one way or another,” Smit said. “I mean, I’d like to see housing sort of come back a little bit and the economy come back but I don’t think there have been material changes in the quarter.”

Finally, Comcast executives were ecstatic with initial TV ratings from the London Olympics, which NBC is broadcasting more than 5,000 hours of TV coverage, in addition to 3,500 hours of streamed video.

Stephen Burke, CEO of NBC Universal, said the London Games would likely break even financially for the network after initially forecast to lose $200 million.

“If you take the first five days of London and you compare them with Beijing [in 2008], we projected [TV ratings] to be down 20% and we’re actually up 9%,” Burke said. “The reality is we’re up versus Athens 26% and we’re about 30% higher than our estimate.”

The CEO added that for the first time in Olympic broadcast history, there is a combined strategy that embraces broadcast, cable, and digital, which results in increased exposure leading up to “great numbers” in prime time.

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