Where is the Cord Cutting? Why Isn't Advertising Better? -- Credit Suisse

Mixed on Advertisingamp160amp160We have updated estimates based on ratings performances QTD with our overall 4Q national TV ad estimate little changed now 03 YY with NFLsports stronger and entertainment softeramp160 Notably 4Q growth is only in line with 3Q39s 00 despite the strong Upfront pricing and volumesamp160 The culpritamp160 Accelerating TV viewing declinesamp160 Of note contacts suggest 1Q19 ad pacings are spotty as macro concerns and tough Olympics comps influence planning though it feels too early to us to call 1Q TV advamp160 While Discovery39s 3Q revision to 2 US ad growth was considered disappointing it appears they will be the fastest growing cable group in 4Q18Positive on HSDamp160amp160Our updated rollup is showing continued strength in broadband subscriber growth at 25 YY continuing 3Q39s 24 pace including sector net adds improving from 569k in 4Q17 to 659k in 4Q18amp160 We see less scope for any upside to 4Q company estimates as expectations on the Street are already at 3Q39s strong levels Further cable39s acceleration in HSD net adds is leveling out at high levels as the telco competitors have an improved fibertoDSL mix Importantly our sector contact suggests the promotional environment is less aggressive than last year and believes the ARPU environment should be improving Comcast did implement a 20month singleplay promo offer in certain areas recently as it likely tries to round out RGUs for the quarter though this is still a favorable price comparison to a full quarter of that promotion in 4Q17Steady on Wirelessamp160amp160Our wireless estimates are unchanged with continued postpaid strength subs 24 YY vs 25 in 3Q18amp160 Cable share gains should pick up with Charter39s full quarter aggressive marketing though our industry contacts do not see outsized traction for Charteramp160 Our discussion with Verizon management suggests that cable share gains still do not come disproportionately from Verizon relative to its marketshare a positive relative to sentimentamp160 Churn remains low and promotional intensity is steady with 3Q levels perhaps even improvedamp160 5G is obviously not impacting the marketplace at this point though Verizon39s recent announcement with Samsung for some period of exclusivity in 1H19 for a 5G phone is intriguingamp160Document Link 37 Pages 1023KBWritten byamp160amp160Douglas Mitchelson Brian Russo Meghan Durkin and Grant JoslinIMPORTANT DISCLOSURE INFORMATION AND ANALYST CERTIFICATION ARE IN THE PDF VERSION OF THIS REPORT AND AT httpsravecreditsuissecomdisclosuresCredit Suisse does and seeks to do business with companies covered in its research reportsamp160 As a result investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this reportamp160 Investors should consider this report as only a single factor in making their investment decisionamp160 For Credit Suisse disclosure information please visit the website or call 1877 2912683amp160 Click here for additional important disclaimersamp160 Click here for global research disclaimerClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writersamp160

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Where is the Cord Cutting? Why Isn't Advertising Better? -- Credit Suisse

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