NEW YORK — The 10-year outlook for the cable industry south of the border is looking bright, according to the most recent research from SNL Kagan, an offering of S&P Global Market Intelligence.
SNL Kagan research indicates the U.S. industry’s broadband advantage and bundling stance will enhance revenues from 2016 to 2026. SNL Kagan has revised its cable industry forecast to incorporate a slightly improved outlook for the video segment and continued upside for broadband services, which will translate into revenue growth, the research company said in a news release highlighting its findings.
Residential revenues are projected to increase from $108.38 billion in 2016 to $117.7 billion in 2026, or by $9.32 billion over the 10-year time span. Contributions from commercial services will help to push total U.S. cable industry revenue from $130.57 billion in 2016 to $140.99 billion in 2026, an increase of $10.42 billion over the next 10 years, SNL Kagan said.
In terms of subscriber growth, SNL Kagan is projecting broadband subscriptions in the U.S. will grow by more than 8 million over the next 10 years, reaching 71 million, which will be more than 1.6 times the number of video subscriptions in the same time period.
In fact, SNL Kagan is projecting that basic video subscriptions in the U.S. will drop by an annual compounded growth rate (CAGR) of 1.5% to 45.4 million subscriptions by 2026, slower than the 1.7% CAGR decrease forecasted in last year’s 10-year projection.
Mounting anxiety regarding cord-shaving or reduced spending on multichannel video has been most evident in the advanced services, SNL Kagan said. If basic cable and advanced services are combined, total U.S. revenues generated from residential video services are anticipated to decrease at a CAGR of 0.5% over the next 10 years, totally $55 billion annually in 2026, SNL Kagan projected.
Finally, despite a decline in net subscribers in the U.S., net advertising revenue is expected to grow at a CAGR of 4.3% through 2026 to reach $6.3 billion in revenues.
“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,” Tony Lenoir and Ian Olgeirson, the SNL Kagan researchers behind the report, said in the news release. “Despite ongoing declines in video, the next 10 years look pretty good for this sector.”
S&P Global Market Intelligence is a division of S&P Global, which provides essential intelligence for individuals, companies and governments to make decisions with confidence. For more information, visit www.spglobal.com/marketintelligence.
