There is a notion, incorrect, that advertising revenues will be a big contributor to telco revenue streams as those firms scale up the size of their video entertainment customer base.Some of the understandable confusion results from glancing at cable industry statistics on overall revenue, including programming networks and cable operators.
While it is true that programming networks derive a huge chunk of their revenue from advertising, cable operators really do not benefit as much.
As this Time Warner Cable chart suggests, advertising actually is quite a small part of the overall revenue mix, and has dropped, percentage-wise, as newer businesses such as high-speed Internet access service and voice have grown.
It's a nice revenue contributor, to be sure. But arguably not more important than churn reduction and retention, in terms of overall revenue contribution. Certainly it is not more important than voice and high-speed data services, going forward.
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