U.S. media company Scripps Networks Interactive (SNI) has struck a long-term deal with Comcast Corporation (CMCSA) – the largest cable MSO in the U.S.
The multi-year contract with Comcast will enable Scripps Networks to offer their popular lifestyle media and interactive channels to Comcast’s Xfinity TV customers on multiple platforms (TV, online, smartphones and tablets) as well as to Video on Demand (VOD) customers.
Higher proliferation of mobile devices has induced Scripps Networks to offer its content to Comcast customers on multiple devices whether at home or away, thereby expanding their reach to the customers. Moreover, application of Comcast’s Dynamic ad insertion technology will further benefit Scripps Networks to keep track of the number of viewers watching their show, hence helping them to improve their TV ratings and simultaneously drive their advertisement revenue.
Successful integration of the U.S. and the U.K. based Travel Channels, re-branding of the FLN channel as Cooking Channel, and the divestment of the struggling Shopzilla networks will help Scripps Networks to maintain future growth by means of generating robust advertising and affiliate-fee revenues.
However, sluggish U.S. economic growth, recent drop in TV ratings coupled with higher programming cost and stiff competition from other Lifestyle Media channels will act as headwinds for the company going forward. Thus, we are maintaining our long-term Neutral recommendation on Scripps Networks.
Currently, Scripps Networks has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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