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Comcast has regional links in top markets

Cabler in competition with local broadcast TV stations

Local TV stations might be wise to keep an eye on Comcast.

The cabler, as part of a concerted effort to muscle into the regional TV spot advertising market, said it has interconnected all 50 of its wholly- owned cable systems in the top 50 U.S. markets.

Comcast’s New York-based ad sales team has been using the interconnections between its various contiguous systems to sell advertising across various regional markets in direct competition with local broadcast TV stations. Each cable net typically allows cable operators 2 minutes per hour of commercial time to sell locally. In an effort to leverage its 21 million sub footprint, Comcast is using interconnection to offer advertisers access to entire DMAs with a single buy and single commercial tape.

“For regional and national advertisers, this makes spot cable as easy to buy as broadcast,” Comcast said in a statement Tuesday. Company can also package together airtime across several common demo cable nets.

Programming, especially niche demos that cable nets like ESPN can provide, is the big driver for advertising, said Oppenheimer analyst Thomas Eagan. “Even if Comcast takes only 1% of the spot market sales currently claimed by the major network-owned TV stations, that equates to $67 million, which could double Comcast’s total advertising revenue.”

Local TV advertising has seen the slowest recovery in the last six months, even as TV primetime network ad sales are pacing strong over last year.

The local spot TV market is pacing barely 2%-3% up over last year.

Comcast recently reported quarterly net advertising revenue of $285 million, which was up 17% over a year ago, thanks in part to increased market share of regional and national spot advertising.

Comcast’s market consolidation strategy includes interconnecting with other cable MSOs to form interconnects in markets where the cabler is not the leading provider.

Company said it had interconnected 48 of the 71 markets in which it had a presence at the end of July.