No. 2 - The TV Trade
Cable companies are striving to be everything to their customers, offering TV, internet and phone services all-in-one. But is this causing them to take their eye off the ball?
On Wednesday, DirecTV (DTV) and EchoStar (DISH) are expected to report that they’re gaining customers because they provide better TV at a lower price. CNBC’s Julia Boorstin is at the National Cable & Telecommunications Assoc. show in Las Vegas, where all the major executives from the satellite and cable industries have gathered.
Julia says the word at the convention is that cable companies are going to be able to maintain their strength for at least the next couple of years. But there will be more competition in the years to come as internet and telecommunications companies build up their content and potentially partner with satellite companies.
EchoStar already has a partnership with EarthLink (ELNK), Eric Bolling notes, and satellite providers as well as content providers could see a lot of upside from ad revenue down the road.
Comcast (CMCSA) disappointed investors by saying it was generating a lot of cash flow but was going to spend the money to compete with the internet, Tim Strazzini says.
Even without the internet, Comcast is a company with great content, Guy Adami says, pointing to the Golf Channel and E! Entertainment as two examples. The stock might not be doing much right now but it’s going to be just fine, he says.
Julia adds that one of the big things she’s noticing at the Cable Show is that the cable companies are clearly focused on bundling their services (widely known as the ‘triple play’) but analysts are saying that customers don’t actually care that much about getting all their services bundled together if it doesn’t save them money. Customers would rather pay less for satellite television than pay for a cable bundle and not save on it, she says.
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Trader disclosure: On May 8, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (JWN); Bolling Owns (DIS), Gold, Silver; Bolling Is Short Nasdaq Futures, Bolling Closed Out His Tesoro Put Trade; CNBC Is A Service Of NBC Universal And Dow Jones