Broadband growth will be key to cable revenues over next decade

By Jim O'Neill on Aug 12 2016 at 5:00 AM

The cable industry will be buoyed by its growing broadband business as consumer preferences change over the next decade, and it expected to drive  residential revenues to $117.7 billion in 2026, up from $108.4 billion this year.

Researcher SNL Kagan’s 10-Year Cable Projections also forecasts a slowing of cord cutting, and offers a slightly improved outlook for the video segment, and says bundling of services also will increase.

Subscriber growth in the broadband business is forecast to reach 71 million subscribers, an increase of more than 8 million users, or more than 1.6X the number of pay-TV customers in 2026.

It expects the industry’s commercial revenues to increase marginally, taking total revenue to $140.98 billion from $130.57 billion, much of it due to broadband growth.

But, SNL Kagan does expect cord cutting to continue, just at a slower rate, a CAGR of 1.5% instead of the 1.7% it saw in the past decade, eroding cable subscriber numbers to 45.4 million.  

A bigger worry, the researcher said, was cord shaving.

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 (see chart)

Despite that decline, ad revenue remains a bright spot, Kagan said, forecasting net advertising revenue is expected to grow at a 4.3% CAGR through 2026 to reach $6.3 billion.

Stay tuned.

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