• by Wayne Friedman , September 9, 2009

Cable networks will grow 4.4% to $44.0 billion in advertising and affiliate revenues in 2009.

This will be down from the 9.4% growth in 2008, landing at $42.2 billion in combined advertising and affiliates revenue, according to a recent report by SNL Kagan. Last year, Kagan says this broke down to a 7.3% advertising revenue growth -- netting $17.8 billion -- and a 11.8% growth in affiliate revenues to $22.8 billion.

Cash flow will also be down in 2009 versus 2008 to just a 2.5% increase, to almost $16 billion. But Kagan says cable networks will bounce back in the next five years, averaging 8.1% in overall revenue growth, with cash flow increasing on average to 9.6% per year.

Cable networks will still be the place to find big cash-flow margins, says Derek Baine, senior analyst at SNL Kagan, in a report: "The exceptional performance of the industry is most evident in the networks' healthy cash flow margins, which averaged 36.9% in 2008. By 2013, we estimate half of all networks will exceed 40%."

The better network performers, in terms of affiliate fees in 2008, were sports-based channels. Seven of the top 20 channels ranked by monthly license fee per sub are sports-based.

In regard to viewership, the better network performers in 2008, according to Kagan, included channels with news content such as Fox News and CNN and children's programming such as Nickelodeon, as well as special events and shows that boosted ratings.

In 2008, national cable ads generated an estimated $20.9 billion in gross revenue, up 7.3% from 2007. However, gross ad revenue is expected to dip slightly in 2009 to $20.3 billion.