SNL Kagan: “Upbeat” 10-Year Outlook for U.S. Cable Market

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NEW YORK: Looking down the line at the next ten years, SNL Kagan has given a sunny outlook for what’s ahead in the U.S. cable industry.

Residential revenues are projected to increase from $108.38 billion in 2016 to $117.7 billion in 2026, or $9.32 billion over the ten-year period. Contributions from commercial services will help push total industry revenue from $130.57 billion in 2016 to $140.99 billion in 2016, or $10.42 billion over the ten-year span.

The firm is projecting nice subscriber growth for the segment. Broadband subscriptions are forecast to increase by more than 8 million over the next ten years, reaching 71 million, and coming in at more than 1.6-times the number of video subscriptions.

Basic video subscriptions, meanwhile, are projected to drop by a compound annual growth rate (CAGR) of 1.5 percent to 45.4 million by 2026, slower than the 1.7 percent CAGR in last year’s ten-year projection.

Regarding cord-shaving worries, SNL Kagan anticipates total revenues generated from residential video services—combining basic cable and advanced services—to fall at a CAGR of 0.5 percent over the next ten years, totaling $55 billion annually in 2026.

Despite a decline in net subscribers, net advertising revenue is expected to grow at a 4.3 percent CAGR through 2026 to reach $6.3 billion.

“Like many industries, cable isn’t immune to shifting preferences, but continued growth in broadband may propel revenue growth on both the residential and commercial end,” said Tony Lenoir and Ian Olgeirson, the SNL Kagan researchers behind the report. “Despite ongoing declines in video, the next ten years look pretty good for this sector.”