Kagan updates retransmission fee projections to $6 bn by 2018

MUMBAI: SNL Kagan has updated its industry retransmission fee projections and now expects that US TV station owners‘ retransmission fee revenues could reach $5.50 billion by 2017 and eclipse $6 billion by 2018, versus the $2.36 billion projected for 2012 .

These projections are higher than those in the November 2011 forecast, when the company had projected that retrans fees would reach $4.86 billion by 2017. The increased projections are due to the success of a wider range of TV station owners in securing sequentially higher retrans fees from multichannel operators over the last year of negotiated deals.

By 2015 that $4.28 billion approaches 10 per cent of the total $43.0 billion that multichannel operators are projected to pay in affiliate fees to basic cable and regional sports networks. SNL Kagan analysis indicates that by 2018, the projected $6.05 billion of retrans revenues would be approximately 23 per cent of the expected $26.2 billion in TV station ad revenues.

SNL Kagan projects that by 2018 the average fee paid per TV station will be slightly less than $1.00, while each multichannel subscriber will be responsible for aggregate retrans fee revenue of $4.86 per sub per month.

For all five major broadcast networks combined in 2015, multichannel providers are expected to pay $3.49 per month, or an average retrans fee of 74 cents per TV station per month, which is significantly below the $6.37 per sub per month that multichannel providers are projected to pay for ESPN, $1.50/sub/month for TNT or the $1.49 sub/month for NFL Network.

SNL Kagan is a resource for financial intelligence in the media and communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries.

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