U.S. Affiliate Revenues: Mid-Single-Digit Growth Forecast Through 2020

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%.



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