Most Investor Upside at Viacom and Time Warner -- Pivotal Research

BOTTOM LINE On our analysis of new data from Nielsen SVOD services including Netflix Amazon Prime and Hulu Plus have now passed 50 TV household penetration in the United States as of the end of February up from 43 in the yearagoperiod Despite this rise core television viewing trends are down only modestly and not by much more in homes accessing SVOD services than in those without them Notably not every network group is down because of the growing availability of SVOD services Looking at data for the period from October 1 2015 to Feb 21 2016 vs the yearago period we can see that viewing of the CBS broadcast network and of Time Warneramp8217s adsupported cable networks are up by more in SVOD homes than in those without SVOD services Ultimately we do not believe the growth of SVOD services meaningfully impacts advertisersamp8217 spending at the medium level but we do see ongoing risks to affiliate fees which can be offset by license fees from the SVOD providersWe continue to view companies focused on video and television favorably and see the most upside vs yesterdayamp8217s trading levels at Viacom and Time Warner While Time Warner stands out solely for its relative riskadjusted growth potential vs peers Viacom is a somewhat more challenging stock to own of course Although it has governance management and related perception issues at this time for investors with sufficiently long time horizons and risk tolerance it provides the greatest potential upside relative to where the stock currently tradesAdditional commentary and data is included in the following noteFULL REPORT INCLUDING RISKS AND DISCLOSURES CAN BE FOUND HERE TV Update 3816pdfThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillagecom MyersBizNet Inc management or associated bloggers

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Most Investor Upside at Viacom and Time Warner -- Pivotal Research

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Most Investor Upside at Viacom and Time Warner -- Pivotal Research

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