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.
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.