Retrans Fees Could Reach $1.2 Billion By 2011: SNL Kagan
Researcher Projects Cable May Begin Paying More Than Satellite Providers By Next Year
John Eggerton -- Multichannel News, 7/1/2009 2:04:25 PM
According to projections from SNL Kagan, retransmission consent fees are expected to increase to $1.2 billion by 2011. That would be more than double the $500 million for 2008, and up strongly from 2009's $739 million in retrans revenue.
Kagan said that cable operators may also begin paying more than satellite providers in retrans fees starting next year.
Broadcasters have increasingly sought cash for their channels in an effort to solidify a second revenue stream in a tough ad market and a changing media landscape.
Not surprisingly, the majority of 2009 retrans fees (62%) came from the top 25 markets.According to Kagan analyst Justin Nelson, the 2009 breakdown for retrans fees will be $352 million from DBS and $315 million from cable, with telcos' share estimated at $71 million.
The average is 25 cents per subscriber.
But Nelson expects cable retrans payments to jump to $424 million in 2010, citing Univision carriage contracts and other major TV groups with escalator clauses kicking in.
Sinclair claimed the highest precent of revenue from retrans at 14%, according to Nelson, while the average over TV groups was between 5 and 10%.
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