Liberty Media Corp (LMCA), Grupo Televisa SAB (ADR) (TV), CBS Corporation (CBS): A Trio of Broadcasting Giants Worth Watching

Steady increases in advertisement and online streaming

CBS Corporation (NYSE:CBS) has completed 80% of its upfront advertisement sales at $2.65 billion for the season starting in September 2013 and ending in August 2014. The company attributes these initial sales to the success of television series like “The Big Bang Theory,” “NCIS,” “Elementary,” and the airing of the Super Bowl. CBS Corporation (NYSE:CBS) had 12 of the top 25 series aired on television in the 2012-2013 season. The company will continue to attract more advertising revenue because of the company’s impressive series lineup and the increasing loyal viewership it is garnering through airing these hit productions over time. This will help the company to increase its entertainment segment revenue to an expected $8.3 billion this year rising from $7.3 billion the last year.

CBS Corporation (NYSE:CBS) entered a deal with LOVEFiLM, a subsidiary of Amazon, to distribute its content for online streaming and boost its revenue from licensing. Currently the licensing fees constitute 20% of revenue. The licensing fees will be around $500 million this year and are estimated to reach $1 billion by 2017. The deal with LOVEFiLM is important because there is an increasing trend to view videos by online streaming via smartphones and tablets due to rising 3G/4G speeds and cheaper data rates. Licensed shows include hit CBS Corporation (NYSE:CBS) series like “The Good Wife” and “Blue Bloods.”

With this deal, CBS Corporation (NYSE:CBS) will gain access to the British and German online-streaming market. In addition, the deal won’t have any impact on the revenue from other syndication, since the company already sold the programs available to LOVEFiLM to other networks for syndication.

Conclusion

Liberty Media Corp (NASDAQ:LMCA)’s holdings are expected to generate future cash flows by increasing their subscriber bases.

Televisa has a steady royalty base among the Hispanic population in the U.S., while its pay television business is track for growth.

CBS’s continued efforts in generating quality and superior content has differentiated it from competitors. Thus, the company continues to attract advertisers. Additionally, its increasing reach into the online streaming market will expand its revenue base.

I recommend a buy on all three stocks.

Madhukar Dubey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article 3 Broadcasting Giants Worth Watching originally appeared on Fool.com Madhukar Dubey.

Madhukar is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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