Basic cable ads bounce back

The basic cable advertising business has rebounded, according to Kagan Research, and will experience “double digit growth as far as the eye can see.” In its annual datebook, Economics of Basic Cable Networks 2006: 12th Annual Edition, Kagan forecasts 12.2% CAGR for basic cable network advertising through 2009.

While basic cable ads won’t achieve the 20+ percent growth rates of the ‘90s, they also won’t feel the pain of broadcast advertising, whose market is shrinking, said Derek Baine, senior analyst at Kagan Research.

“Cable networks continue to benefit from increasing subscriber bases as multichannel penetration grows, CPMs rise and viewers migrate from broadcast to cable,” he said in a statement released by Kagan. “We expect broadcast networks will continue to suffer from the explosion of new channels available on cable and double digit-growth in cable network program spending. The breadth and depth of both original content and hit movies on cable is truly impressive.”

Cable channels such as ESPN, Discovery, TNT and USA get about 44% of their revenue from advertising and the rest from carriage fees paid by cable service providers.