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Cable Still Growing Despite Ad Woes

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Despite a challenging advertising market, cable networks will post 4.4 percent revenue growth in 2009, hauling in some $44 billion in ad sales and affiliate dollars, per a new SNL Kagan study.

While the gains will be muted when compared to last year’s 9.4 percent growth ($42.2 billion), there are signs that 2009 will be remembered as something of an aberration, said Derek Baine, senior analyst at SNL Kagan.

“It’s likely to be just a blip in the long-term growth of an industry that has increased revenue at a CAGR of 12.6 percent over the past decade,” Baine said, who noted that few industries can boast that kind of performance, especially in such a tempestuous economic environment.

Since 2002, affiliate fees have accounted for the greater part of cable’s overall revenue mix, taking some of the onus off the ad sales side of the ledger. Last year, net advertising dollars contributed to roughly 42 percent ($17.8 billion) of the total revenue figure, while carriage fees added up to about $22.8 billion, or 54 percent of the whole. (The 4 percent remainder was chalked up to unspecified “other” income.)

The list of big earners roughly coincided with ratings prowess, as ESPN boasted the biggest ad haul of 2008, taking in $1.65 billion in gross ad revenue, an increase of 4.6 percent versus the prior year’s $1.57 billion. Nickelodeon notched second with $1.21 billion, up 0.9 percent from 2007, while USA Network claimed third with $941.5 million in sales, an increase of 6.1 percent year-over year.

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