MoffettNathanson Research says that this year, affiliate fees -- subscriptions and/or retransmission fees for TV network groups -- are expected to rise 9% versus (to $46.3 billion) compared with flat growth for advertising ($39.4 billion).
Next year, affiliates fees will climb another 9% to $50.6 billion with advertising inching up 3% to $40.8 billion. Through the next five years, revenue from affiliate fees will have compounded annual growth rate of 8% versus advertising at 3%.
Overall, U.S. affiliate fees average 50% of the total media industry growth. Last year was the first time affiliate revenues topped advertising revenues for media companies.
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In total dollars, however, the “other” category -- which includes domestic and international program license fee sales and other revenues -- maintains the largest revenue category for media companies.
In 2015, it is estimated to climb 5% to $64.8 billion, going to $81.3 billion in 2020.
AMC Networks get the highest percentage of revenue from affiliate fees -- 35%. Viacom is next at 29%; Scripps Networks Interactive, 29%; Discovery Communications, 22%; Walt Disney, 20%; Time Warner, 16%; and then CBS, at 7%.
Unlike long-established cable TV companies with a history of obtaining affiliate fees, CBS, and other broadcast network based companies, have been ramping retransmission fees in the last several years -- which will continue to rise quickly.
Over the past five years, MoffettNathanson Research says CBS has grown retransmission revenues by 34% and 21st Century Fox by 16% -- this compared to mostly cable TV companies growth in the mid-to-high single-digit percentage range.
This is a very confusing report. Are we talking about the fees that the cable systems and satellite disrtibutors pay to the cable program channels to carry their shows as well as retransmission fees paid by the cable systems to the stations for their fare? If so, the numbers may be correct. But the incomes earned by the cable programmers from the cable systems and satellite guys constitutes the vast majority of the dollar figures quoted. I think that is very misleading to lump both kinds of payments together.