While TV ad results may be volatile in the short term for networks, major TV groups can take comfort from steady revenue in the next few years on the affiliate/retransmission front.
Through 2020, affiliate fees are projected to continue their growth at mid-level percentages -- 5.1%, on a compound annual growth-rate basis. This does not include any monetary benefits from subscription video-on-demand platforms.
In the second quarter, major TV network groups witnessed a 6.3% hike in cable-network affiliate fees to an aggregate $9.6 billion.
Growth from retransmission fees for broadcast networks was more rapid. In the second quarter, retransmission revenues gained an average 27% to $1.3 billion. NBCUniversal posted a 65% gain to $363 million, while CBS added 25% to $332 million, Fox gained 10.9% to $311 million; and Walt Disney earned 12.8% to $265 million.
Over the next three years, Time Warner cable networks are estimated to see 8.4% higher affiliate fees on average, while 21st Century Fox is expected to see 7.6% more; Discovery, 5.4% higher; AMC Networks, 4.7% more; Walt Disney, 3.3% higher; and Scripps Networks Interactive, 2.9% more.
Only Viacom might not see a rise -- averaging 0.8%.
Two years ago, MoffettNathanson estimated that U.S. affiliates fees for cable TV networks would climb an average of 7.1%.