Pay TV Profit Forecast: Steep Declines By 2023

Pay TV providers could lose money on deals made with every single TV network group should growth rates from subscribers' fees continue.

Bernstein Research analysis, along with SNL Kagan research, says gross profit margins -- which now average 25% for pay TV providers -- are projected to fall to 17% in 2018. They will be zero in 2023 if trends continue.

Aggregate affiliate fees on average for cable, satellite and telco TV companies could rise from $45 per subscriber to $58 in 2018 and $90 in 2023 if expected growth rates continue. Customers expenses, including marketing, will grow from $16 per month per subscriber currently to $18 in 2018 and $22 in 2023.

Currently, the average monthly price per subscriber for a pay TV package is $82, projected to rise to $92 by 2018 and $112 in 2023. But that won’t be enough.

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Todd Juenger, senior analyst for Bernstein Research, writes: “MVPDs [multichannel video programming distributors] would lose money on every single network group by 2023. Obviously, current growth rates cannot continue.”

Pay TV providers currently pay the most to TV networks groups Disney ($9.93 a month) and Fox ($5.09/month). This will go to $14.67 for Disney and $9.43 for Fox in seven years.

Time Warner’s TV networks are estimated to climb to $6.30 in 2023 from $3.71 now. Viacom is expected to grow more slowly -- to $3.85 from $3.04.

CBS is estimate to more than double its fees from pay TV providers, projected to be $2.23 a month in 2023 from $1.11 a month now.

1 comment about "Pay TV Profit Forecast: Steep Declines By 2023".
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  1. Paula Lynn from Who Else Unlimited, April 7, 2016 at 8:47 p.m.

    They keep raising rates and they will lose more money.

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