Cord-cutting by subscribers shifting to streaming platforms will continue for the next five years which will result in national TV ad revenue falling under $20 billion by 2027.
Still, S&P says there will not be a totally industry disappearance anytime soon. “Our outlook is not calling for a total collapse of the market, however, as we believe there is still value in cable network ads over the next five years as the industry continues its slow migration to on-demand platforms." says Scott Robson, senior research analyst at S&P Global Market Intelligence:
Specifically, Robson says, “niche” cable TV networks will have the most trouble -- as witnessed by the high-profile carriage dispute between Charter Communications and Walt Disney, where small cable networks were not included in that carriage deal.
“Niche cable networks may be vulnerable to being dropped by more major operators,” Robson says.
Last year, cable network revenue sank 3.4% to $23.6 billion -- the lowest level since 2010.
The 2023-2024 TV season upfront advertising market saw pricing -- the cost-per-thousand viewing costs -- post rare declines of 2% to 5%, according to media agency executives.
The silver lining for cable TV networks, according to S&P, is sports programming. Sports TV cable advertising revenue grew 2.8% last year to $4.3 billion. However, critics continue to worry about sports programming transitioning more to streaming platforms.
S&P sees more modest declines in upcoming political/Olympic advertising years, such as next year's Presidential election. More modest national TV cable advertising declines of 2% in 2024 and 2026 are expected.