Comcast at Goldman Sachs Conference Notes

Brian Roberts

Had the biggest upfront ever

” we had a really biggest upfront I think the company has ever had in this most recent upfront. We sold more upfront up 8% of our inventory than we did a year before. Our price was up. We have said around the same kind of number.”

The ratings decline gets offset by CPM increase

” all-in-all, the ratings decline gets offset by the CPM increase and the total dollars continue to be very stable and that’s critical and that happened again this year and in the scattered market, we’re seeing continued strength there. ”

Are you really getting the value out of the digital platforms that you are saying?

“the more time I spend talking to the advertising folks who take a show, Tonight Show with Jimmy Fallon or shows that are out in digital in great numbers and many shows are there, and are you getting paid on the Facebook platform, no. And so, and are there advertising getting their value from some of those other platforms for what they say they’re getting versus what they are getting. There is a lot of swirl around those questions. ”

Xfinity mobile offering

“So we’re really pleased with the start. Just to remind everybody. It’s MVNO on the Verizon network. So we’ve a good relationship. It’s working well. You can activate it right away. We’ll ship it to you in 24 hours. You can pick it up. Get it by in a store, and there’s only two plants, really simple product. Maybe the most simple, elegant execution the company has ever had, really great packaging, really simple, $12 a gig or $45 unlimited. That’s it. And when the new products come out like today, I believe we’ll have those products in all our stores and on our digital site, same time as anybody else.”

We paid 1/4 for NBC what AT&T paid for Time Warner

“We have resources that allowed us to buy NBCUniversal when times got tough, more will change. We bought NBC for about $26 billion. People said, buy more stock at that moment. Today AT&T is paying over $100 billion and I think the cash flow with NBCUniversal and Time Warner are pretty comparable.”

Netflix at Goldman Sachs Conference Notes

David Wells – CFO

Content spend going to continue to grow

“it took us about a decade to get to where we are, over 100 million global subscribers, so we’re super excited about the potential for what the next decade might hold for us. We’ve got about 5 billion to 6 billion content spend growing beyond that, Ted I think mentioned $7 billion number lately, that’s going to continue to grow if we’re able to continue to grow our global subscriber base like we think we can.”

There is diminishing marginal return to content spend at some point

“What I think that there is generally strong belief that there is diminishing marginal returns to content spend. And certainly, at some point, that has to become true whether you believe that there is a growing body, a library of content that’s already been paid for, or whether you feel like there is so much content on the site you’re starting to cannibalize your own content and there is sort of no point to adding more.”

Disney FY 3Q17 Earnings Call Notes

Bob Iger

The future is direct relationship between content creators and consumers

” It’s been clear to us for a while with the future of this industry will be forged by direct relationships between content creators and consumers. Given our incomparable collection of strong brands that are recognized and respected the world over, no one is better positioned to lead the industry into this dynamic new era, and we’re accelerating our strategy to be at the forefront of this transformation.”

Ending distribution agreement with Netflix

“With this strategic shift, we’ll end our distribution agreement with Netflix for subscription streaming of new releases beginning with the 2019 calendar-year theatrical slate. These announcements marked the beginning of what will be an entirely new growth strategy for the company, one that takes advantage of the opportunities the changing media and technology industries provide us to leverage the strength of our great brands.”

If we wanted to take ESPN direct we could

“I’m not going to comment specifically about the agreements. There are elements to the agreement that – well, first of all, if we wanted to take ESPN direct, we could. There are elements to the distribution agreements that we have that would cause us to if we were to bring the service direct to the consumer or create some – I’ll call them sub-optimal circumstances for us. I’m not going to get into detail about that. If we were to create a direct-to-consumer app that had the linear services, just as Netflix is distributed by multichannel servers out there or product out there, we would give our distributors an opportunity to distribute our app and other third parties as well.”

Creating content exclusively for the service

“But we’ve already begun the development process at the Disney Channel and at the Studio to create original TV series and original movies for this service. So if the Studio makes, let’s call it, roughly 10 films a year or distributes 10 films a year – that includes Marvel and Pixar and Star Wars and Disney-branded and Disney Animation. We’ve commissioned them to make, to produce more films with the incremental films being produced very, very specifically and very exclusively for this service. So this will represent a larger investment in Disney-branded intellectual property, both TV and movies.”

This gives us optionality

“I think there are forces, whether they’re technological in nature or sociological or economic in nature, out there that are changing the way media is consumed in general, and I don’t think this is either going to hasten them or exacerbate things in any way. What it does do, though, is a couple of things. First of all, it gives us the ability to leverage the strength of our brands, which a lot of our peers and competitors do not have. Secondly, it gives us what we’d call optionality. It’s a word I’ve not used very much in my life, but it gives us the flexibility, really, to move our product to the consumer in many new ways, ways that we’ve not been able to do before, because of just how strong this platform is that we bought control of.”

CBS 2Q17 Earnings Call Notes

Leslie Moonves – CBS Corp.

Yes sports bidding is becoming more competitive out there

“Mike, on the sports, yes, the competitive bidding is becoming more and more out there, and obviously there’s digital players in the sports arena. The good news is we have the NCAA tournament till 2032, so I think we’re fairly secure in the near- and far-term on that. In terms of the other rights, look, the NFL has always been extremely supportive of broadcast television. Yes, there’s going to be a digital component, and you’re right, this service could be – allow us to be a bigger player in that and perhaps get certain digital rights as these contracts come up more and more. But once again, we have proven that broadcast is better than cable, ascertained by our NCAA ratings versus some of the cable people who have the NCAA, and I think the NFL has always stated there’s a reason that the Super Bowl is always on network television. It’s just higher rated, nobody has the reach that we do. There’s no question that digital players will become more important, but we think they will go along with broadcast, not alone.”

Joseph R. Ianniello – CBS Corp.

We have Netflix envy

Laura, we have Netflix envy, and we try to present our results in a way to give you the ability to value us on an equivalent metric. So we’ll leave the valuation to you guys. We’ll post the results and you tell us what it’s worth.

Viacom FY 3Q17 Earnings Call Notes

Robert Bakish – President and CEO

Pay TV decline of ~3.5%

“So, there’s a bunch of questions in there. Let’s talk about the sort of pay-TV environment and some of the decline that’s been discussed. So, a couple of pieces. So, the internal data that we have showed a slight degradation from Q2 to Q3, and that data shows a run rate of about minus 3.5%. That’s a sad number.”

Investing in ad load reduction

“There’s a couple of pieces to the answer that question, although it ends with yes. Ad load reduction is an investment we’re making in the health of our brands which we believe will pay strong dividends. But going through it, we’re coming out of an up front that we’re very happy with. We have up volume. We’ve got a mid-singles rate of change or you could about it as CPM. Good demand across brands, so that’s a nice foundation.”

Scatter looks strong

“Scatter right now, we’re actually very pleased with scatter. I’d say it’s certainly a decent market. You look at MTV as an example and scatter is up double-digits. So, we don’t see any issues with access to money. We also candidly have the benefit that we do have an ADU bank that were anything to weaken a bit, we can ride through it, but again, the scatter market continues to look good.”

Comcast (CMCSA) Q2 2017 Earnings Call Notes

David N. Watson – Comcast Corp.

Internet is a key driver of growth

“High-speed Internet continues to be the largest contributor to overall cable revenue growth…there is significant runway ahead of broadband. And the key to me when you look at this is the upside of the opportunity. We’re sitting at 45% penetration right now. So there’s growth just there. The overall market is growing with only 75% of households subscribing to Internet access…We deliver very fast, reliable service. And the focus – the shift that we’ve had around innovation is around WiFi in the home.”

Michael J. Cavanagh – Comcast Corp.

On costs

“Programming costs, we came in in the first half of the year at around 12% and I wouldn’t expect it to be much different in the second half. In terms of non-programming costs, you saw the great results in the first half of the year and we think those trends are steady…We do expect programming costs as we’ve said to come down into the high single-digits in years after 2017.”

Facebook 2Q17 Earnings Call Notes

Mark Zuckerberg

2B people use FB every month

“This quarter we reached an important milestone for our community. 2 billion people now use Facebook every month, and more than 1.3 billion people use it daily. ”

AI police on FB

“I am excited about how AI will improve people’s experiences across our products. We’re finding AI is both delivering consistent improvements to many of our systems, like News Feed, search, ads, security, and spam filtering and more. But more than just improving these existing experiences, I expect AI to change the way that we do business in some important ways. So for example, today to keep our community safe, we rely on people flagging content that might violate our community standards for us to review. In the future, AI will be able to help flag more of this content faster before people have even seen it. Now we’ve started using AI to fight terrorism and keep propaganda and extremist accounts off Facebook. We’ve even started experimenting with using AI to understand texts that might be used to promote terrorism.”

Now AI can target you with Ads

“On the business side, we’re seeing a large shift in the way that marketing works. In the first wave of marketing, people would buy ads and media they thought their customers might watch like a TV show that had similar demographics, but they wouldn’t know who saw their ads. The Internet gave people the power to target their messages to people who actually might be interested and to measure results much more precisely, and that was a big improvement. And now AI is taking this a step further. Now you can put a creative message out there, and AI can help you figure out who will be most interested.”

Sheryl Kara Sandberg – Facebook, Inc.

David M. Wehner – Facebook, Inc.

Slower supply growth leads to higher pricing

“I would really just point to the overall dynamics of the system. And again, what we’re seeing is with slower supply growth, that’s going to play out to higher pricing. And again, are we effective? And we’ve been effective at delivering good return on investment for our advertisers and getting better at converting what we have as inventory into what they care about as outcomes. And that from a systemic point of view is what’s playing through there.”

Netflix 2Q17 Earnings Call Notes

Reed Hastings – Founder and CEO

Rewards of great content

“I think we’re just seeing that the rewards of doing great content focused on the quality of the service are paying off.”

It’s not us vs Amazon

“Amazon is super successful around the world if you look at U.S. with Prime, incredibly successful. It just doesn’t seem to take away from us, so I wouldn’t characterize it as us versus Amazon in Germany. I would really characterize it as can we have a service that’s so great that Germans find it worthwhile paying for. And clearly we’re succeeding at that making our service better and better.”

We add where we see success

” You ask about how we prioritize? Generally, when we see success, we try to add on to that until we reach a point of diminishing returns. And so, if we’re going to see success in some markets, we may up the content budget in those markets.”

We’re still a small player compared to linear TV and YouTube

“we’re such a small player in our viewing compared to linear TV, compared to YouTube. So we’ve got a long way to go to have more and more content to please more and more members and continue to grow.”

Ted Sarandos

Have to match local tastes

Yes, as Reed mentioned, matching the program into local taste is really the key and we’ve seen it in our expansion through Latin America, our expansion into Europe. And as we look to Asia, we have to get better and better matching those tastes. And those tastes are not as easily aligned with Western tastes. So we’ll invest more time and energy in Asia putting some people on the ground in Asia that we haven’t historically, but well within how we’ve looked at the size of the teams generally but locating them more likely outside of the U.S. as we continue to grow for local audiences in Asia and throughout the rest of Europe.

If you’re not failing maybe you’re not trying hard enough

“we look at a lot of things like failure is not such a bad thing and if you’re not failing maybe you’re not trying hard enough. So when we have a good hit rate and even with the recent cancelations, 93% of our shows have been renewed. So you want to be introspective and look at that and say, are we being adventurous enough, Daredevil, we’re trying new things. And I think when you think of things – when you have a very high hit ratio, you definitely want to keep second guessing yourself even though you do.”

Shows get cancelled on networks all the time

“the more shows we add, the more likely in absolute numbers that you’ll see cancelations of course. But that’s only novel Netflix and it’s still novel because you see on network television about two-thirds – about a third of the content gets cut in the first season versus our content which is mostly renewed. And it’s not because we’re less careful about it, it’s because we can more efficiently build it and not a 100% of the time. So we want to launch shows. We love when there’s a deep passion fan base for a show. We just need it to be big enough to support the economics of that show so we don’t create opportunity cost for future fans of new shows.”

Internet TV is an enormous space and there’s going to be lots of competition

“I think Internet television is an enormous space and there’s going to be lots of competition. And as they come in, they’re going to bid up the cost of the best stuff which is great. It’s great for consumers, because more things get made. And it’s great for creators because they’re more buyers at the table. So we expect the content cost to go up on the top premium things, but I think, as I said, I think that’s a good result for everybody.”

Snap 1Q17 Earnings Call Notes

Evan Spiegel

We need to be a creative company and when we create great stuff other people are going to copy it

“Look, I think if there’s one thing that I’d want to communicate today, it’s probably just the overall importance of creativity to our business. And I mean this from every perspective, from the team that we hire to how they work together; the creative culture that we have; the products that we have that inspire people to create. And I think our overall strategy, obviously which is to deliver value through creativity. And I think the bottom line is, like, if you want to be a creative company you’ve got to get comfortable with and basically enjoy the fact that people are going to copy your products if you make great stuff.”

Everyone is going to develop a camera strategy

And I think we’ve seen this happen a lot in technology. When Google came along, everyone really felt like they needed a search strategy. When Facebook came along, everyone felt they needed a social strategy. And now I think with Snap, with our company, we believe that everyone is going to develop a camera strategy. Because I think we really help people understand how valuable the camera is, because it’s really the center of everything that we do. And I think, at the end of the day, just because Yahoo, for example, has a search box, it doesn’t mean they are Google.”

The Walt Disney (DIS) Q2 2017

Robert A. Iger – The Walt Disney Co.

The studio is doing well

“Our Studio’s extraordinary run continues. In fiscal 2017, we’ve already had two releases that topped $1 billion in global box office: Rogue One and Beauty and the Beast. With a strong opening weekend, Marvel’s Guardians of the Galaxy Volume 2 just became the 15th consecutive Marvel movie to open at number one. It’s already delivered $156 million in U.S. box office, bringing the worldwide total to $456 million to date…we have an incredibly robust slate of great Marvel movies ahead with four releases in the next 14 months alone”

ESPN primetime audience increased

“Almost 80% of the people who connect with ESPN each month access the content on mobile devices. In Q2, ESPN’s suite of mobile apps reached a monthly audience of almost 23 million unique users who collectively spent more than 5.2 billion minutes engaging with ESPN on those platforms during the quarter. Mobile is clearly going to play a major role in the future of media…..ESPN’s primetime audience in fiscal Q2 was up 15% year-over-year, and the inclusion of out-of-home viewing and WatchESPN lifted that audience by another 10%. ESPN also delivered its largest first quarter primetime audience in five years according to Nielsen, which reports on a calendar basis.”

On cord cutting

“…give us a little bit of credit for being very candid with all of you on an earnings call two summers ago when we talked about sub losses in the expanded basic bundle. We did that because, one, we wanted to be candid; and two, we wanted to signal that we had our eyes wide open about what was going on and we fully intended to address what we were seeing and what we’ve continued to see…Those losses have come from cord-nevers, cord-cutters and what had been a migration to lighter packages on those platforms that did not include ESPN. It has been a blend, and it’s been fairly steady”

The future is buying what you want

“So while I think it’s possible that there’ll be an omnibus sports – multiple sports package offered direct-to-consumer, it’s more likely that consumers will have an opportunity to buy the sports they want when they want it as well.”