Clarification on GMST numbers.
It has been a few months since I put the numbers together and I've thrown out my source documentation, just too much paperwork. But have recalled some of the underlying numbers.
As carrier fees the IPG does indeed get between $.15 and $.30 or per month, per subscriber, I utilied $.20 per subscriber in my model at 50,000 or $2.40 a year for carrier fees.
However, the TV Guide channel and the Games channel get much lawyer carrier fees in the range of about $.03 per month or about $.36 cents or so per year (with Game channel perhaps, at least presently, on the low side of that).
Therefore carrier fees with cable companies will get you to may $5 per year, per cable or satellite subscriber. The rest will need to come from the cut of the handle on Games channel and advertising.
For TV Guide channel, based upon my best analysis from the several broker reports in hand I calculated $1.89 per year in advertising fees per subscriber. This may be low as subscription grows and if the channels popularity grows but wanted to stay moderate in my analysis there.
For the Guides, and this is a much bigger WAG as there is no history I calculated $2.52 per subscriber/per year in advertising revenues. I think this may be quite low in the long run (also keep in mind GMST shares its ad revenue with these new deals at 50/50 from the prior 80/20, but this should incentivize GMST's partners to start pushing ads - Comcast knows that content is king, and the IPG is the portal to cable content).
For IPG licensing, as stated I utilized $2.40 per subscrib er per year or $120 million per year.
From this total alone we get:
IPG cable subscribers $2.40 per annum
IPG advertising $2.52 per annun
TV Guide channel $.36 per year per subscriber
TV Guide channel advertising $1.89
Games Channel carriage fees $.30 per year per sub
Games channle ads $.25 per year
TV Games take from handle $1 per year
= $8.72 per sub. I do think there is much upside here, particularly in the IPG, but that is my present WAG at 50 million subs.
Toss into this the CE business which I also put at 50 million GMST CE units sold per annum and I get another $3.60 per year, per subscriber (I'm still not real clear on how the CE licensing is going with the "recurring revenue model" that Yuen first switched to in his last days. Just talk about it taking 3 years to get the money they use to get in 1, but the model being recurring and numbers at approximately $.30 per month. I think this model might apply more to the cable boxes then the DVDRs and televisions but I did not want to double count, so there might be some upside to the CE licensing).
Adding the CE licensing in and your north of $11 per subscriber.
To this you can add in the TV Guide mag, other licensing activities.
Yes, I'd say the model I presented is north of $10 per subscriber, per year. Most of the numbers are taken from educated broker reports based upon standard fees and historical fees paid from cable and satellite. Some of the advertising is historical projections, the Guides however are uncharted territory except for the carrier fees.
I hope this clarifies the core revenue streams and per subscriber numbers better, at least as it applies to cable and probably satellite.
Tinker
P.S. The $250 million Comcast deal may very well be a pre-payment of carrier fees over a period of many years, therefore it will be counted each year as income but not free cash flow, as the cash flow is all reached up front.
Again, it is the advertising on the Guides which is really the tremendous unknown and where I think GMST really sees it future. |
