Cable ad revenue growth in 2008 will slow but remain steady in 2009 and beyond.

Monterey, Calif. (Vocus/PRWEB ) August 12, 2008 — SNL Kagan today released the 2008 edition of “Economics of Basic Cable Networks,” the most comprehensive network-by-network analysis of the cable programming industry available.

According to SNL Kagan, 2007 was a banner year for cable networks. Industry revenue increased by 12.6% in 2007 to $38 billion. Ad revenue jumped 10.5% to $19 billion, while license fees (affiliate revenues) soared almost 15% to more than $20 billion.

Despite the recent economic downturn, SNL Kagan expects 2008 to be another strong year, thanks mainly to license fees, which result from long-term contracts and provide cable networks with nearly half of their revenue.

SNL Kagan forecasts ad revenue will be up 10.4% for all of 2008, despite an expected weakening in the second half of the year. That growth will be cut to 4.7% in 2009, recovering to 11.1% in 2010 on the back of a strengthening economy.

“This year’s weak economy has resulted in extremely volatile ad markets with major advertisers scrambling to allocate budgets where they will get the most bang for the buck,” said Derek Baine, senior analyst for SNL Kagan. “Companies that publicly report ad sales for their cable nets showed positive second-quarter results spanning a wide range from +1% to +28%. However, we expect to start seeing more negative numbers in the second half of 2008.”

SNL Kagan’s ten-year projections for cable networks show slow but steady growth trends:

• Total industry multichannel subscribers are expected to grow 1.3% per year, roughly half the rate witnessed between 1998 and 2007.
• Total industry ad revenue is expected to increase at an annual rate of 8.1%, slower than the 11.6% posted over the previous decade.
• Total industry revenue is expected to grow 8.9% per year, with affiliate fees decelerating to a growth rate of 9.5% per year over the next ten years versus a 16.1% growth rate over the previous decade.
• Total industry cash flow is expected to grow at a CAGR of 10.8% per year, reaching almost $40 billion by 2017.
• The average industry cash flow margin is expected to rise from 36.4% in 2008 to 42.5% by 2017.

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.

“Economics of Basic Cable Networks” is available exclusively as a part of the SNL Kagan Information Service. For more information on this report and other data sets within the SNL Kagan Information Service, call 866.296.3743 or email SNLKaganSales @ snl.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 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 industrywide for actionable advisories, expert opinions, best practices, regulatory assessments and market data. Contact KaganConsulting @ snl.com or 831.624.1536 for more information.

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[Via PRWeb: Technology Multimedia]

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