SNL Kagan Study Shows Strong Growth in Cable Network Industry

Economics of Basic Cable Networks, a new study from SNL Kagan, shows that cable network revenue is much stronger than reported by other sources. According to the research, based on surveys with network executives, SNL Kagan finds that advertising revenue for cable networks was up 9% last year.

The cable network industry is much healthier than previously believed, with total revenue up 12% and cash flow up 13%. In addition, cash flow margins remain healthy, with an industry average of 34% and some networks in the 50% to 60% range.

SNL Kagan’s research also concludes that most of the growth is being generated by the major media conglomerates, with a continued bifurcation in the market. Independently owned cable networks are struggling as compared to networks that are owned by companies such as NBC-Universal, Time Warner and Viacom.

"If you are a cable network that is not owned by one of the major players, the environment is very tough," says Derek Baine, Senior Analyst for SNL Kagan. "For example, The Black Family Channel, which was on the air for eight years, recently announced that it is unable to make it on its own and is merging with Gospel Music Channel, while Outdoor Channel recently announced a reduction in its license fee."

The 2007 edition of Economics of Basic Cable Networks contains proprietary must-have data on more than 150 cable networks — including a number of Hispanic networks — that are either privately held or buried in the income statements of major media conglomerates. This best-in-class data, including forecasts, analysis and key financial information is presented in more than 300 easy-to-use spreadsheet-format data tables.

A wide range of cable networks depend on this data to benchmark themselves against competitors, and equity analysts and investment bankers rely on the report for more granular company data than is available in public filings. The study provides the resources needed to create pro forma industry projections using different scenarios as well as analyze historical financial statements for many networks from inception. It also includes contact information for key executives and tracks ownership changes.

SNL Kagan’s Economics of Basic Cable Networks is available exclusively as part of the SNL Kagan Information Service. For more information on the report and other media & communications data sets within the SNL Kagan Information Service, call 866-296-3743 or e-mail SNLKaganSales@snl.com.