Total U.S. Cable Network Revenue Will Reach $33.8 Bil. In 2006, Says Kagan
Kagan Research’s annual survey of network executives, data from which is in the current edition of BENCHMARKING CABLE NETWORK FINANCIAL STATISTICS, indicates the cable network industry continues to fire on all cylinders. Based on conversations with top executives at nearly every major cable network, Kagan analysis shows total revenue was up 12.7% to $29.9 bil. in 2005. This trails slightly behind the growth rate of 13.6% posted in 2004, due in large part to continued softness in affiliate revenue.
According to the study, the national advertising market looks healthy, but affiliate revenue is starting to slow and networks will likely see more growth in CPMs than in annual license fees. Network executives expect a rebound in 2006 and Kagan projects revenues will reach $33.8 bil.–13.1% over 2005.
“The results of our study show revenue at most major cable networks has been growing at a rapid clip,” says Derek Baine, Sr. Vice President of Kagan Research. “Continuing to lead in terms of total revenue, ESPN took in $3.7 bil. in 2005, $2.1 bil. more than its nearest competitor. Nickelodeon, TNT, FSN, MTV and USA all topped $1 bil. in revenue, while ten other networks had revenue greater than $500 mil.”
Other relevant estimates from BENCHMARKING CABLE NETWORK FINANCIAL STATISTICS include:
— License fees for networks owned by media conglomerates will continue to rise on an annual per-sub basis of 2%-5%/year;
— MSOs and satellite operators will continue to shuffle their channel lineups, dumping networks (even established ones) with licenses fees considered to be excessive in light of their ratings;
— Media conglomerates will have a difficult time launching new spin-offs, even with leverage of other networks and retransmission consent;
— Independently-owned networks will find it almost impossible to get carriage without the backing of a major multichannel operator;
— Barring a recession, ad revenue will remain in double-digit growth territory for the foreseeable future.
BENCHMARKING CABLE NETWORK FINANCIAL STATISTICS provides financial metrics on more than 100 cable networks, including tiered digital networks. Drawing on exclusive, proprietary surveys of top industry executives, this study features analyst commentary on ratios, trends, forecasts, and individual network performance. The digital package lets users search, sort, filter and share key data, including ratings, subs and ad revenue, expenses and cash flow, and 5-year comparative analyses plus forecasts for each network.
For table of contents and more information on BENCHMARKING CABLE NETWORK FINANCIAL STATISTICS go to www.kagan.com/BCNFS
About Kagan Research, LLC
For over 35 years, media and communications operators, content providers and institutional investors have relied on Kagan Research for thought leadership in media business research. Kagan’s consulting, publishing and data services provide exclusive benchmarking data and analysis, market advisories and long-range forecasts for TV, radio, cable, satellite, wireless, movie and sports sectors, as well as informed perspectives on emerging media, digital communications, and Internet technologies. Kagan is one of the world leaders in valuing and appraising media assets. For more information, visit www.kagan.com. Kagan Research is a division of JupiterKagan, Inc.
About JupiterKagan, Inc.
JupiterKagan, Inc. was formed in 2006 from the merger of JupiterResearch and Kagan Research, two companies providing thought leadership, research and advice in the domain of media and telecommunications, the Internet and emerging consumer technologies. The company’s deliverables include continuous information services (available by subscription), research reports, data, inquiries with research analysts, appraisals, litigation support and consulting. JupiterKagan is headquartered in New York City with offices throughout the U.S. and Europe. For more information, visit www.jupiterkagan.com.