Cable TV's Revenue, Ad Growth Weakens Into '09: SNL Kagan
This story was written by David Kaplan.
This year appears bad enough for media revenues, but for cable TV, 2009 is nothing to look forward to, according to an industry forecast by media researcher SNL Kagan. Looking back at last year, the industry had something to celebrate, as revenue grew by 12.6 percent in 2007 to $38 billion and ad revenue jumped 10.5 percent to $19 billion. And while this year is still going to be fairly healthy, it will be mostly due to license fees (or "affiliate revenues") which reached almost 15 percent to more than $20 billion in 2007. License fees from long-term contracts and provide cable networks with nearly half of their revenue. Some highlights from Kagan's report:
-- Growth rate slashed: Cable TV ad revenue will be up 10.4 percent for all of 2008. That growth will be cut to 4.7 percent in 2009, recovering to 11.1 percent in 2010 as the economy is expected to bounce back.
-- A slow decade: Subscribers are projected to grow 1.3 percent per year for the next decade, roughly half the rate witnessed between 1998 and 2007. Ad sales' annual rate will be around 8.1 percent, slower than the 11.6 percent posted over the previous decade. Kagan says the total industry's revenue should be up 8.9 percent per year, with affiliate fees slowing to a growth rate of 9.5 percent each year over the next decade, compared to a 16.1 percent growth rate over the last 10 years. Release
By David Kaplan