Kagan: Cable Future Bright - Multichannel

Kagan: Cable Future Bright

Broadband, improved video metrics will drive revenue through 2026
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Residential cable revenue is expected to rise 8.6% from $108.4 billion in 2016 to $117.7 billion by 2026, fueled by a slightly improved outlook for the video business and continued growth in broadband, according to an SNL Kagan report.

Factoring in additional sales on the commercial side and total cable revenue is expected to rise from $130.57 billion in 2016 to $140.99 billion in 2026, or about 8% over the 10-year period, according to Kagan.

Kagan said several factors will drive future results: continued subscriber growth as broadband subscriptions swell by more than 8 million over the next 10 years to 71 million customers; and a slowdown in the decline of video customer additions as basic video rolls are expected to decline by an annual compounded growth (CAGR) rate of 1.5% to 45.4 million by 2026, compared to 1.7% in last year’s 10-year projection. Finally, while there continues to be worries around reduced spending on multichannel video, especially around advanced services (Kagan estimates total residential video revenue will dip 0.5% over the next 10 years), advertising revenue is expected to grow at a 4.3% clip 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, in a statement. “Despite ongoing declines in video, the next 10 years look pretty good for this sector.”