As the gap further narrows, Kagan predicts cable spending will be up 43% between 2006 and 2009--with broadcast increasing 12%, according to the "Economics of Networks: Original Programming."
While the growth rate is greater for cable, broadcast, of course, still invests considerably more--some $7.6 billion last year, compared to cable's $5 billion. And that total is for far fewer networks than the ever-growing cable fleet.
Kagan says HBO's success started with "Sex and the City" in 1998, followed by "The Sopranos" in 1999. These were seminal moments, inspiring cable networks to dive into original scripted programming themselves with major investments. "HBO changed the landscape for cable networks forever," the research firm said.
Kagan's cable figures do not include pay networks, such as HBO and Showtime. Both, with award-winning series like HBO's "Entourage" and Showtime's "Weeds," have experienced a 32% increase over the last five years to $853 million. That growth rate is expected to ebb over the next three years to 13%.
The high cable growth rates are not surprising, given that major media companies, such as NBC Universal and Disney, are increasingly looking to their cable outlets as growth engines. In June, NBCU chief Jeff Zucker told analysts that the company's entertainment cable channels, such as USA and Bravo, account for one-third of profits. And ESPN is a crown jewel for Disney.
Examples of heavy cable investments in expensive original-scripted fare are mounting, highlighted by offerings such as TNT's "The Closer," FX's "Rescue Me" and AMC's "Mad Men," not to mention a slew of reality shows: History Channel's "Ice Road Truckers"--and Disney's "High School Musical 2" film.
Traditionally, cable networks have sought to capitalize on broadcasters running a bevy of reruns during the summer to showcase their originals, but cable networks are increasingly going head-to-head with broadcasters during the season. This fall, USA will carry original episodes of "Law & Order: Criminal Intent" on Thursdays against heavy competition, and a second season of Lifetime's strong "Army Wives" is slated for next spring.