Study: Next 10 Years Look Upbeat For Cable

For the U.S. cable industry, the 10-year outlook is bright, according to SNL Kagan, whose most recent information indicates that the industry’s broadband advantage and bundling stance will enhance revenues from 2016 to 2026.

The revised cable forecast incorporates a slightly improved outlook for the video segment and continued upside for the broadband services, which will translate into revenue growth.

The research projects residential revenues will increase from $108.38 billion in 2016 to $117.7 billion in 2026, or $9.32 billion over the 10-year interval.

Contributions from commercial services will help push total industry revenue from $130.57 billion in 2016 to $140.99 billion in 2016, or $10.42 billion over the 10-year period.

Additional highlights from SNL Kagan’s 10-Year Cable Projections include:

• Subscriber Growth: Broadband subscriptions are forecast to swell by more than 8 million over the next 10 years, reaching 71 million, and coming in at more than 1.6 times the number of video subscriptions.

• Less Dramatic Decline: Basic video subscriptions are projected to drop by an annual compounded growth (CAGR) rate of 1.5% to 45.4 million by 2026, slower than the 1.7% CAGR in SNL Kagan’s 10-year projection made last year.

• Cord-Shaving Worries: Mounting anxiety around reduced spending on multichannel video has been most evident in the advanced services. Combining basic cable and advanced services, SNL Kagan anticipates total revenues generated from residential video services to fall at a CAGR of -0.5% over the next 10 years, totally $55 billion annually in 2026.

• Advertising Strength: Despite a decline in net subscribers, net advertising revenue is expected to grow at a 4.3% CAGR through 2026 to reach $6.3 billion

“Like many industries, cable isn’t immune to shifting preferences, but continued growth in broadband may propel revenue growth on both the residential and commercial end,” said Tony Lenoir and Ian Olgeirson, the SNL Kagan researchers behind the report. “Despite ongoing declines in video, the next 10 years look pretty good for this sector.”