Cable Sees Uptick In Affiliate Fees, Broadcast Retrans Still Strong

With national TV advertising remaining flat at best this year, analysts are concerned about lower affiliate revenues in the coming periods.

MoffettNathanson Research expects U.S. domestic affiliate fee growth for cable network groups -- not including fees from subscription video-on-demand providers -- to increase 4% in the second quarter.

The percentage would be down from 5% in the previous quarter, and similar to 5% to 6% hikes in previous periods dating back to the fourth quarter 2015.

The best of cable network groups -- 21st Century Fox -- is projected to see an 8% increase to $2.4 billion. NBCUniversal will be up 5.5% to $1.6 billion, while Time Warner will see a 5% gain to $1.5 billion, AMC Networks will add 5% to $256 million, while Walt Disney will be up 3.2% to $2.6 billion.

In addition, Discovery (including Scripps Networks Interactive), will be 0.5% higher to $614 million; Viacom will be down 0.5% to $957 million.

However, when including all affiliate fees -- including the retransmission deals that broadcast TV stations get -- it is estimated those revenues will climb 7.3%.



Looking at the broadcast TV groups: NBCUniversal is projected to be up 54% to $557 million, while Fox will add 28.2% to $375 million and Disney will be 21% higher to $320 million. CBS will be up 10% to $373 million.

Cable groups collectively are estimated to see a 4.4% rise to $10 billion. Broadcast groups will see a 29% hike to $1.6 billion.

For cable networks, MoffettNathanson says lower estimates are pegged to traditional pay TV subscribers -- estimated at annual declining rate of 3.4% through the first quarter of this year. However, when including virtual pay TV subscribers, total pay TV subs appears to be relatively stable -- slipping just 0.5%.

MoffettNathanson Research projects minimal gains in national TV advertising for the rest of 2018, flat in the second and third quarter, and dipping 1% in the fourth quarter.

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