U.S. Cable Nets Show Gains Despite Recession

MONTEREY: Total revenues at the U.S. cable networks increased by more than 9 percent last year, according to SNL Kagan, with growth slowing slightly this year before rebounding in 2010.

In 2008,  total revenues gained 9.4 percent to $42.2 billion; ad revenues were up by 7.3 percent to $17.8 billion and affiliate revenues were up 11.8 percent to $22.8 billion. This year, overall revenue growth is expected to slow to 4.4 percent, reaching $44 billion. However, SNL Kagan sees a rebound with a 8.1-percent average growth forecast for 2009 to 2013.

“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 percent over the past decade,” said Derek Baine, a 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 percent in 2008. By 2013, we estimate half of all networks will exceed 40 percent.”

SNL Kagan also reports that, for the second year in a row, TBS reported the most cable TV households, followed closely by the Weather Channel and Discovery. Networks with news content, children’s programming and special events emerged as the ratings and household leaders in 2008. In terms of license fees, sports channels dominate—seven of the top 20 channels ranked by monthly license fee per sub are sports-based.