Comcast 2012 Annual Report Download - page 58

Table of Contents
In both 2012 and 2011, 13% of our Cable Networks segment actual revenue and pro forma combined revenue was generated from
our Cable Communications segment. These amounts are eliminated in our consolidated financial statements but are included in the
amounts presented above.
Advertising
Advertising revenue is generated from the sale of advertising time on our cable networks and related digital media properties. Our
advertising revenue is generally based on audience ratings, the value of our viewer demographics to advertisers, and the number of
advertising units we can place in our cable networks’
programming schedules. Advertising revenue is affected by the strength of the
national advertising market, general economic conditions and the success of our programming.
Advertising revenue increased in 2012 primarily due to increases in the price and volume of advertising units sold, which were
substantially offset by declines in audience ratings at certain of our cable networks. Pro forma combined advertising revenue
increased in 2011 primarily due to an increase in the price of advertising units sold.
Content Licensing and Other
We also generate other revenue primarily from the licensing of our owned programming to various distribution platforms, including
cable and broadcast networks and to digital distributors, such as Netflix.
Content licensing and other revenue remained flat in 2012. Pro forma combined content licensing and other revenue increased in
2011 primarily due to increases in the licensing of our owned content from our cable production studio.
Cable Networks Segment – Operating Costs and Expenses
Our Cable Networks segment operating costs and expenses consist of programming and production expenses, advertising and
marketing expenses, and other operating and administrative expenses. Programming and production expenses include the
amortization of owned and acquired programming, sports rights, direct production costs, residual and participation payments,
production overhead, costs associated with the distribution of our programming to third-
party networks and other distribution
platforms, and on-
air talent costs. Advertising and marketing expenses primarily consist of the costs incurred in promoting our cable
networks and costs associated with digital media. Other operating and administrative costs and expenses include salaries, employee
benefits, rent and other overhead expenses.
Operating costs and expenses increased in 2012 primarily due to higher programming and production expenses that resulted from
an increase in sports programming rights costs, as well as from our continuing investment in original programming. Pro forma
combined operating costs and expenses increased in 2011 primarily due to higher programming and production expenses
associated with an increase in original programming.
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Comcast 2012 Annual Report on Form 10-
K