"Modest" TV Industry Growth Forecast
August 23, 2007
Although big hits like "Lost," "Desperate Housewives," "CSI: Crime Scene Investigation" and "CSI: Miami" have delivered record licensing deals internationally, this success has not spread to lesser hits, spelling modest overall revenue growth for the TV industry, according to a report from SNL Kagan.
The report, called "Economics of TV Programming & Syndication," reveals that the TV programming business model has dramatically changed since the beginning of this decade. International markets are again seeking out US programming after years of looking to local sources for their content.
Over the next 10 years, international revenues from television series could increase at an annual rate of about 4.3%. New revenue streams have also evolved and matured, including DVD, Internet and digital media such as iTunes.
The report explores how cable networks have become an important distribution outlet for producers of TV shows. Cable networks are increasingly ordering scripted and reality series, while paying big license fees for off-network one-hour series such as the "CSI" franchise. The downside has been station syndication.
"Station syndication has lacked off-network sitcoms to choose from, because no big hits (like 'Seinfeld' or 'Friends') have developed recently," said Deana Myers, senior analyst for SNL Kagan. "As a result, deal prices are not as high as they were five years ago, but on the flip side, we are seeing much higher prices on secondary cycles of 'Seinfeld' and 'Friends.'"