Rising disposable income and increased advertising expenditure will drive the industry.
New York, NY (PRWEB) August 28, 2014
The Cable Networks industry has faced competing trends in the past five years. New channel offerings have increased the number of consumers willing to pay for upgrades on their existing cable subscriptions. According to IBISWorld Industry Analyst Darryle Ulama, “specialized services enabled industry operators to charge premium prices to consumers and advertisers interested in targeting niche audiences.” Rising revenue per consumer counteracted an overall drop in advertising spending that stemmed from low corporate profit in the aftermath of the recession. Still, cable networks have faced heightened competition from other media as viewers increasingly opt for internet-based services, such as Netflix, Hulu and Amazon. Although the industry is expected to grow in the five years to 2014, revenue is anticipated to drop in 2014.
In response, the industry is expanding its offerings and focusing on customer service and outreach via social networking, website and application development, as well as traditional call centers. Although outsourcing has been a trademark trend in the industry, overall employment has increased during the period.
“Waning production and distribution costs due to new technologies have diminished operating costs,” says Ulama. This trend, combined with pricing premiums, has expanded the industry's profitability in 2014. Lower barriers to entry and high margins have encouraged industry expansion; therefore, the number of establishments is expected to grow in the five years to 2014.
Rising disposable income will enable consumers to spend even more on industry services over the next five years. An expected increase in advertising expenditure in the five years to 2019 will also contribute to revenue, which is projected to grow over the same period. A slowly diminishing consumer base will hinder revenue growth because subscribers are increasingly choosing to spend time and money on streaming media services. In order to encourage continued spending on industry services, operators are expected to invest an increasing proportion of revenue in production, consumer testing and marketing. As a result, profitability is forecast to grow slowly over the next five years.
For more information, visit IBISWorld’s Cable Networks in the US industry report page.
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IBISWorld industry Report Key Topics
The Cable Networks industry operates studios and facilities and distributes TV programs on a subscription or fee basis through cable systems. This industry includes specialty TV cable networks and pay-per-view programming. However, programming production is excluded from the industry, as are other TV providers such as satellite broadcasters.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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