Articles for Time Warner

Slower Growth Expected for Disney Consumer Products Revenues

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Monday, August 23rd, 2010 by Trefis Team

Trefis members predict slightly lower revenues for Disney (NYSE:DIS) over the Trefis forecast period from sales of merchandise (toys, games, memorabilia, kids clothing) at Disney stores. However, slower consumer products revenue growth will have little impact on Disney, since Consumer Products constitute only around 7% of the $37 Trefis price estimate for Disney’s stock (12% above the current market price of $33).

The majority of Disney’s value instead comes from its media properties (ESPN, Disney Channel, ABC Broadcasting, etc.) where Disney competes with companies like Time Warner (NYSE:TWX), News Corp (NASDAQ:NWS), CBS (NYSE:CBS), and Viacom (NYSE:VIA).

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Disney Needs 30% Annual Revenue Growth from Playdom

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Monday, August 23rd, 2010 by Trefis Team

Disney (NYSE:DIS) recently announced that it was spending about $763 million to acquire Playdom, a social gaming service that competes with Zynga and others. Disney competes with News Corp (NASDAQ:NWS), Time Warner (NYSE:TWX), Viacom and other diversified media conglomerates.

Big media companies covet the huge audiences that social networking startups have built over the past few years. Below we explain why Disney’s acquisition of Playdom makes strategic sense and discuss its possible impact on Disney’s stock. … To read the full article Subscribe to Trefis Pro

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Lower Fee per HBO Subscriber Expected for Time Warner

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Friday, August 20th, 2010 by Trefis Team

Time Warner’s (NYSE:TWX) stock could see a slight decline from lower than expected monthly subscription fees per HBO subscriber. Monthly subscription fees are an important source of revenue for media companies like Time Warner, Viacom (NYSE:VIA) and News Corp (NASDAQ:NWS).

We currently have a Trefis price estimate of around $30 for Time Warner’s stock, about 4% below the current market price of around $31 and estimate that HBO constitutes around 24% of Time Warner’s stock.

Trefis members have created forecasts for two key drivers of Time Warner’s stock over the last week: (1) Fee per HBO Subscriber and (2) HBO Penetration of US Pay TV Households. These forecasts suggest that Fee per HBO Subscriber will trend below the estimates of the in-house team of analysts at Trefis, while HBO Penetration of US Pay TV Households will trend in-line.

Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

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Film Business Could Lift News Corp Stock by 5%

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Thursday, August 19th, 2010 by Trefis Team

News Corp (NASDAQ:NWS) posted banner results in filmed entertainment during its 2010 fiscal year, which ended last quarter. The growth was driven by successful releases like like Avatar and Alvin and The Chipmunks: The Squeakquel.

News Corp’s Fox Studios division includes 20th Century Fox, Fox Searchlight and Blue Sky Studios. It competes with divisions of Disney (NYSE:DIS), Time Warner (NYSE:TWX) and others. Based on the company’s generally strong results for fiscal 2010, we have raised the Trefis Price estimate for News Corp’s stock from $18 to $19.91.

We see an additional 5% upside for the stock if the filmed entertainment division manages to regain its historic 2006 market share levels over the course of our forecast period. Our analysis follows below. … To read the full article Subscribe to Trefis Pro

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Lower Viacom Share of DVDs Sold in US

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Wednesday, August 18th, 2010 by Trefis Team

Trefis members have created forecasts for two key drivers of Viacom’s (NYSE:VIA) stock over the last week: (1) US DVD Pricing and (2) US DVD Market Share. These forecasts suggest that US DVD Pricing will trend in-line, while US DVD Market Share will trend slightly below the estimates of the in-house team of analysts at Trefis. These projections imply a small downside to Viacom’s stock.

Viacom sells DVDs under the Paramount Pictures brand. It competes with studios owned by media conglomerates like Time Warner (NYSE:TWX) and News Corp (NASDAQ:NWS). We currently have a Trefis price estimate of $36.65 for Viacom’s stock, slightly below with the current market price of $37.31.

Viacom’s stock is quite sensitive to (1) US DVD Pricing and (2) US DVD Market Share. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

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Time Warner Benefits From Rising Cable Ad Prices

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Friday, August 6th, 2010 by Trefis Team

Time Warner (NYSE:TWX) is benefiting from rising cable advertising prices, which are pushing up the media giant’s ad revenues. We expect this happy trend to continue and have raised the Trefis price estimate for Time Warner’s stock from $26.91 to $29.51.

Time Warner operates in three primary business areas: (1) cable TV with the HBO, CNN and TNT networks; (2) film with Warner Brothers studios; and (3) magazine publishing. The cable TV business constitutes just over half the company’s share value according to our analysis. Time Warner competes with other media conglomerates like News Corp (NASDAQ:NWS), Disney (NYSE:DIS), Viacom (NYSE:VIA) and CBS (NYSE:CBS).

If cable advertising prices rise higher than our current forecast, Time Warner would likely experience faster revenue growth and improved profit margins. In this scenario, the stock could see an upside of 3% to 4% or even more. Our analysis follows below. … To read the full article Subscribe to Trefis Pro

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ESPN Crucial for Disney’s Success

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Tuesday, July 27th, 2010 by Trefis Team

ESPN, owned by Disney (NYSE:DIS), is the global leader in sports video programming and arguably the world’s most popular sports channel. Disney competes with other media and broadcasting companies like Time Warner (NYSE:TWX) and News Corp (NASDAQ:NWS). We currently have a Trefis price estimate of $38 for Disney’s stock, about 11% above the current market price of $34.

Trefis members have created forecasts for two key drivers of Disney’s (NYSE:DIS) stock over the last week: (1) ESPN Fee per Subscriber and (2) ESPN EBITDA Margin. The member forecasts for ESPN Fee per Subscriber trend slightly above the Trefis forecast.

ESPN is the most valuable division for Disney, constituting around 32% of the $38 Trefis price estimate for Disney’s stock. ESPN telecasts popular shows like SportCenter and also has rights to major sporting events like the NFL, NBA, and the FIFA World Cup.

Disney’s stock is quite sensitive to (1) ESPN Fee per Subscriber and (2) ESPN EBITDA Margin. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

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ESPN, HBO and Fox Sports: Top 3 Cable TV Revenue Generators for Media Stocks

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Tuesday, April 20th, 2010 by Trefis Team

The stocks of media companies Disney (NYSE:DIS), Time Warner (NYSE:TWX), and News Corp (NASDAQ:NWS) are dependent on the revenues generated by their top cable channels ESPN, HBO, and Fox Sports, respectively. While ESPN and Fox Sports are sports focused channels, HBO is known for its films and drama.

Below we compare the revenues generated by the top three US cable channels and the significance of their contribution to the stocks of their respective parent companies.

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People Magazine Worth 5% of Time Warner’s Stock, 2x More than TIME Magazine

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Friday, April 16th, 2010 by Trefis Team

Time Warner (NYSE:TWX) is one of the largest media companies in the world. The company is in three primary businesses: (1) TV with HBO, CNN and TNT (2) film with Warner Brothers studios (3) magazine publishing. Time Warner competes primarily with the other major media companies such as News Corp (NASDAQ:NWS), Disney (NYSE:DIS), Viacom (NYSE:VIA) and CBS (NYSE:CBS).

We estimate about 15% of Time Warner’s value is attributable to its magazine business, which includes renowned magazines like Fortune, InStyle, People, Sports Illustrated, and TIME.

Below we compare People and TIME magazines in terms of advertising and subscription revenues, and demonstrate why People is twice as valuable as TIME for Time Warner’s stock.

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CBS Could See 8% Stock Upside If Radio Ad Market Improves in 2010

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Thursday, April 15th, 2010 by Trefis Team

CBS’ (NYSE:CBS) radio business has seen steady declines in advertising revenues over the past few years. We estimate that radio business constitutes 13% of the $9.22 Trefis price estimate for CBS’ stock. In comparison, other media companies like Disney (NYSE:DIS), Time Warner (NYSE:TWX) and Viacom (NYSE:VIA) have little or no presence in the radio market.

BIA/Kelsey, a financial and strategic adviser to media companies, estimates that the radio ad market will begin to slowly recover in 2010. We estimate that there could be an 8% upside to our $9.22 Trefis price estimate for CBS’ stock if the radio ad market were to grow instead of decline as we forecast.

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