SNL Kagan Expects National Cable Advertising Sales To Continue Double-Digit Growth

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But local ad sales are not expected to keep pace with growth rates remaining flat.

Six point eight percent for local over the next five years is low

SNL Kagan's newest study, "Benchmarking Cable TV Advertising Statistics," reports that while 2006 was a banner year for cable ad sales, the 2007 market was divided between national strength and local market weakness.

SNL Kagan forecasts a 10% CAGR for national cable ad sales between 2007 and 2011, bringing cable network gross billings from less than $20 billion to more than $28 billion.

However, cable ad sales in local markets are estimated to grow at a low CAGR of 6.8% over the next five years, reaching $5.7 billion by 2011. National elections may provide local sales with a boost, but that gain might be diminished by the faltering economy. SNL Kagan forecasts an 8.1% rise in 2008, well below both 2006 estimate of 11.5% growth and the 12.8% gain from the last national election year.

“Six point eight percent for local over the next five years is low,” said Derek Baine, senior analyst for SNL Kagan. “The advertising industry is underexploited to a large extent. A year ago, major cable operators were projecting double-digit growth for 2007, when in fact it has been relatively flat.”

While individual networks are no longer growing in the 10% to 20 % range, there are several new networks coming on the air, and many networks are receiving more distribution. When a network grows from 20 million to 40 million subscriptions, their ad revenue grows correspondingly.

“There are many more cable networks with many more viewers,” added Baine. “Broadcast networks have been losing viewers, and it’s going to get worse. The longer the WGA strike persists, the more likely viewers will flee broadcast for cable. Broadcast is replacing scripted series episodes with extensive reality programming — making cable even more appealing.”

"Benchmarking Cable TV Advertising Statistics" is available exclusively as part of the SNL Kagan Information Service. For more information on this report and other media and communications data sets within the SNL Kagan Information Service, call 866-296-3743 or e-mail SNLKaganSales@snl.com.

About SNL Kagan
SNL Kagan is the ultimate resource for complete financial intelligence on the broad and dynamic media & communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries. The SNL Kagan suite of products integrates breaking news, comprehensive data and expert analysis into an electronic database available online and updated around the clock. SNL Kagan combines the 38-year heritage of Kagan Research with parent company SNL Financial's 20 years of experience in providing essential guidance to Wall Street and to America's top corporations. For more information, visit http://www.snlkagan.com.

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Lauren Keyson
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