Why Cable Stocks Deserve A Boost

FCC chairman Kevin Martin’s stymied bid to regulate cable TV didn’t do much to get cable stocks out of Wall Street’s doghouse.

As CNNMoney’s Paul R. LaMonica notes, on a day the Dow rallied, Comcast (CMCSA),  Cablevision (CVC) and Time Warner Cable (TWC) all barely budged. All three are trading just above their 52-week lows, which they hit earlier this month.

Martin’s regulatory threat was supposed to be weighing cable down, but that threat’s basically gone at this point. Remaining: Fears that cable’s core TV business is vulnerable to satellite, the telcos, and to the Internet. Here’s one way for the cable guys to convince investors that they’re worthy again — persuade them that they’re finally figuring out advertising.

Cable has long ignored advertising and concentrated on raking in subscribers fees. Cable gets to sell two minutes of ads per hour, and currently they get some of the lowest ad rates in the business. But given that cable controls set-top data, and has the ability to target ads based on viewer behaviour and demographics on a zipcode or even household basis, that seems likely to change. For an example, see Cox’s recent experiments with ReMax, which use set-top data to let the brokerage target women more likely to buy or sell houses.

Then again, if you believe Jim Cramer, Google is the only company with upside on the ad business.

Earlier: Cable Regulation: Stillborn At The FCC
Cox Mines Set-Top Data for RE/MAX

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