Economics of Basic Cable Networks
Monterey, Calif. (Vocus) September 10, 2009
SNL Kagan today released the 2009 edition of "Economics of Basic Cable Networks," the most comprehensive network-by-network analysis of the cable programming industry available.
According to SNL Kagan, overall results for 2008 were robust, despite the weak economy. Ad revenues grew 7.3% to $17.8 billion, affiliate revenues were up 11.8% to $22.8 billion and total revenue popped 9.4% to $42.2 billion.
SNL Kagan expects growth will be more modest in 2009, projecting total revenue will rise only 4.4% to $44.0 billion and cash flow will grow just 2.5% to nearly $16 billion. However, the industry is expected to rebound, with total revenue growing, on average, 8.1% per year during the 2009-2013 period, and cash flow increasing 9.6% per year.
"While 2009 won't be as strong as past years, it's likely to be just a blip in the long-term growth of an industry that has increased revenue at a CAGR of 12.6% over the past decade," said Derek Baine, senior analyst at SNL Kagan. "The exceptional performance of the industry is most evident in the networks' healthy cash flow margins, which averaged 36.9% in 2008. By 2013, we estimate half of all networks will exceed 40%."
Other highlights of the study include:
- TVHH Growth: For the second year in a row, TBS reported the most cable TV households, followed closely by the Weather Channel and Discovery.
- Ratings & TVHH: Due to the prevalence of delayed-viewing technology, channels that broadcast news content, children's programming and special events emerged as the ratings and household leaders in 2008.
- License Fees: Sports-based channels continue to dominate the license-fee landscape (seven of the top 20 channels ranked by monthly license fee per sub are sports-based).
- Advertising: In 2008, national cable ads generated an estimated $20.9 billion in gross revenue, up 7.3% from 2007. However, gross ad revenue is expected to dip slightly in 2009 to $20.3 billion.
About Economics of Basic Cable Networks
"Economics of Basic Cable Networks" is available exclusively as a part of the SNL Kagan Information Service. SNL Kagan's forecasts are generated from a close tracking of company-reported financials and regulatory sources, and from an annual survey of top industry executives, who provide a unique viewpoint on their own network's economics.
For more information on this report and other data sets within the SNL Kagan Information Service, call 866.296.3743 or email SNLKaganSales(at)snl(dot)com.
About SNL Kagan
SNL Kagan, a division of SNL Financial LC, is a comprehensive resource for financial intelligence in the media and 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. For more information, visit http://www.snlkagan.com .
About Kagan Media Appraisals
Kagan Media Appraisals, the consulting arm of SNL Kagan, offers custom studies, white papers, briefings, business plans, research reports and appraisals from SNL Kagan's team of expert analysts. KMA is recognized industry-wide for actionable advisories, expert opinions, best practices, regulatory assessments and market data. Contact KaganConsulting(at)snl(dot)com or 831.624.1536 for more information.
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