Revenues Drain from the U.S. Cable / Satellite Programming Ecosystem. Part 2: Subscriber Losses for a Snapshot for 23 Channels

In my previous post, Byron Media’s Dr John Morse captured the year-to-year subscriber losses for a selection of U.S. Cable / Satellite channels.

  • Nat Geo Wild and Smithsonian gained subscribers, though from smaller footprints than the major networks.
  • Read the full report here.

Lost Revenues:

What is the revenue impact of these subscriber losses?

  • Basic cable channels enjoy a dual revenue stream: from affiliate fees paid for each subscriber; and from advertising.
  • Affiliate fees are set in steady, long-term contracts between the channels and cable operators like Comcast or satellite systems like DirectTV.
  • Monthly per subscriber fees vary across the network landscape.
    • ESPN‘s is close to $8.00
    • Rupert Murdoch’s Fox News is around $1.10.
    • The Discovery digi-net American Heroes is $0.14

The following worksheet captures my back-of-envelope estimate of the revenue losses (and two gains) from network subscribers in the year since October 2017.

The math is based on my estimate of the monthly subscriber fee for the channels, though I haven’t seen any of the contracts.

Estimated
Revenue /
Subscriber /
Month**
Estimated
Subscriber
Revenue / Year:
Change 2017-18
($’000)
Network Subscriber Universe:
Change, October ’17 –
October ’18 (‘000)*
A&E -1,924  $      0.33  $        (7,619)
AMERICAN HEROES -3,922  $      0.14  $        (6,589)
ANIMAL PLANET -3,705  $      0.17  $        (7,558)
BBC-AMERICA -622  $      0.15  $        (1,120)
DISCOVERY -3,031  $      0.48  $      (17,459)
FOOD -2,611  $      0.21  $        (6,580)
FOX NEWS  -2,750  $      1.11  $      (36,630)
HGTV -1,943  $      0.30  $        (6,995)
HISTORY -1,882  $      0.19  $        (4,291)
ID -3,084  $      0.16  $        (5,921)
MTV -2,076  $      0.56  $      (13,951)
NAT GEO CHANNEL -1,091  $      0.29  $        (3,797)
NAT GEO WILD 1,246  $      0.16  $          2,392
OWN: OPRAH -2,978  $      0.25  $        (8,934)
SCIENCE -5,289  $      0.13  $        (8,251)
SMITHSONIAN 3,605  $      0.13  $          5,624
SYFY -2,433  $      0.29  $        (8,467)
TLC -3,307  $      0.26  $      (10,318)
TRAVEL CHANNEL -866  $      0.17  $        (1,767)
TRU TV -1,741  $      0.34  $        (7,103)
VELOCITY -369  $      0.26  $        (1,151)
VH1 -1,893  $      0.25  $        (5,679)
WETV -1,959  $      0.16  $        (3,761)

Source: * Nielsen Cable UEs October 2018
** Peter Hamilton analysis.

Takeaways

  • Revenue losses flow directly to programming budgets and operations.
  • Their impact is felt as staff cutbacks, more development expense & effort demanded of producers, fewer hours commissioned, fewer episodes in reorders, harsher deal terms and more.
  • Efficient, repeatable series are promoted at the expense of single docs and limited series.
  • Network buyers are more averse to risk and are more likely to be fearful of their jobs in a time of staff contraction.
  • (Listen to my podcast with Michael Hoff.)
  • Meanwhile, the shrinking subscriber base makes it harder for networks to maintain their ratings, thereby draining the other revenue source – advertising.

LISTEN TO MY PODCASTS

My coverage in podcasts and posts of trends in measuring digital engagement in video content is sponsored by Parrot Analytics.

And read more about John Morse and Byron Media here.


Updated August 2018

Original analysis and coverage from DocumentaryBusiness.com
95+ pages, with charts and links

Read More Here…
Download Now: $39.95