Can Cable Programmers Keep Raising Prices?
The price of cable has skyrocketed in recent years, leading many consumers to cut the cord. But don't blame the cable companies entirely. Programming costs at many pay-TV distributors have increased faster than revenue per subscriber. Last year, Comcast's (NASDAQ: CMCSA) programming expenses increased more than 10% while video revenue climbed less than 4%.
While Comcast says it expects programming expenses to continue increasing for the foreseeable future, those increases may be slower than in the recent past. BTIG analyst Rich Greenfield doesn't see any incremental value programmers can offer to justify further price increases. That presents a challenge for major media companies like Disney (NYSE: DIS), 21st Century Fox (NASDAQ: FOXA), Viacom (NASDAQ: VIAB), and Discovery Communications (NASDAQ: DISCA).
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Source: Fool.com
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