Tuesday, April 21, 2009

Cable Finds a Revenue Stream that Works

Despite the current economy, experts seem to be optimistic about the future of the cable industry. They don't anticipate that cable will experience the same trauma that traditional media is experiencing.

Protected by a dual income stream
One of cable's biggest strengths is its dual income stream which is its biggest protector right now. Even though cable's total ad intake could come in somewhere between being up one percent to being down by three percent during 2009, carriage fees will likely break any fall that occurs.

Broadcast networks fall short
Viewer fragmentation is another big issue. According to Nielsen, data ad-supported cable is up 10 percent in prime season to date, while the Big Four broadcast networks have plummeted another seven percent. The core audience demographic 18 to 49 age group of cable viewers is up nine percent from last year while NBC, CBS, ABC and FOX had a combined drop of 11 percent.

Surviving the economy
If cable giants like Discovery, Turner and Scripps are expected to perform well this year despite the dismal effects of the economy is having on broadcast networks, they still need to make it through the beginning of the first quarter, a period in which media spending typically declines after the holiday season.

To put things into perspective, Peter Koeppel, president of a Dallas media buying agency Koeppel Direct stated, "after 9/11 general advertising cut back significantly and I expect similar cut backs in the second quarter of 2009 which will create more opportunities for direct response advertisers."