The traditional pay-TV sector saw a decline in subscriptions for the ninth consecutive year according to a new report from S&P Global Market Intelligence. The decline was largely due to cord cutting, with penetration dropping from over 80% in 2011 to 34.4% by the end of 2024. This shift reflects a broader consumer preference for streaming services over traditional cable, S&P said.

"Basic cable networks in the US shed subscribers in 2024 at an average rate of 7.1% as the pay TV universe continues to contract. This marks the ninth consecutive year of the declining subscribers for the industry as consumers trade in their traditional pay TV subscriptions for streaming services and other digital options."

Competition from streaming SVOD services as well as virtual multichannel video program distributors (vMVPDs) like YouTube TV. Overall, there were 23.0 million virtual multichannel subscribers, including services like YouTube TV.

Among the 190 networks analyzed, 36 have over 60 million subscribers, while 49 have less than 10 million. This disparity highlights the uneven distribution of subscribers across networks, with some networks maintaining a strong subscriber base despite industry challenges, S&P said.

The most widely distributed channels were C-SPAN, with 69.6 million subscribers, followed closely by Food Network with 68.4 million. Both networks benefit from being included in basic packages, contributing to their high subscriber counts, S&P said.

The average cable network is anticipated to see a 5.4% annual decline in subscribers from 2025 to 2029, with C-SPAN and Food Network projected to lose 15 to 20 million subscribers by 2029.

C-SPAN announced last week that YouTube TV and Hulu Live Plus would begin carrying the non-profit network this fall.

A new study from S&P Global Market Intelligence Kagan highlights the importance of football in the U.S. TV and streaming industries, with new data showing that it is by far the most popular sport. and a new analysis predicting the NFL will be hauling in record media-rights revenue for its 2025-26 season.

Overall, broadcasters and streamers have inked agreements worth nearly $110 billion for NFL media rights over 11 years, the S&P Global Market Intelligence Kagan study estimated. This more than doubles the previous agreements, showcasing the league's strong media presence and financial growth, the study said.

The S&P study also stressed that the league is strategically focusing on media rights opt-outs in 2029 and expanding its international presence to achieve NFL Commissioner Roger Goodell's goal of generating $25 billion in revenue by 2027.

As part of those deals, Netflix and YouTube are expanding their NFL coverage, with Netflix televising two Christmas games annually from 2024 to 2026, valued at $150 million per year. YouTube will stream its first exclusive game this season and has entered a multiyear deal for an annual Super Bowl Flag Football game, the study noted.

The deals are also crucial for U.S. broadcasters. While NFL viewership saw a 2.2% decline in domestic viewership in 2024, the league's media presence grew with new rights partnerships and increased streaming engagement, maintaining its strong appeal among U.S. audiences, the research firm said.

Another major development is the recent NFL-ESPN deal, which marks a significant shift in the sports media industry. As part of that agreement, ESPN acquired NFL Network, NFL RedZone, and NFL fantasy football assets in exchange for the NFL taking a 10% stake in ESPN. This deal enhances ESPN's offerings and strengthens its position in NFL broadcasting.

The newly released S&P Global Market Intelligence Radio & TV Annual Outlook from Kagan finds some good news in this year's ad-revenue outlook and some not-so-good news for the next five years, as core advertising categories continue to slump.

The study forecasts that U.S. TV and radio stations will reach $36.19 billion in total advertising revenue in 2024, up 9.3% from $33.10 billion in 2023, primarily from the influx of record political ad spending in a presidential election year.

S&P Global Market Intelligence Kagan's 2024 projection also shows $24.95 billion from TV stations — including core national and local spot, political and digital/online — and $11.24 billion from radio stations, which includes national and local spot and digital, excluding network and off-air.

However, the report predicts negative growth for TV advertising over the next five years as traditional media continues to lose advertising share.

Amid those declines, the report finds that the local ad market continues to be stronger than the national side of the spot ad business, thanks to broadcast stations’ close ties with the local community.

That will help stations as ad agencies and major brands continue to shift budgets to digital-native platforms as more content moves from linear to streaming.

Even so, core ad categories, including automotive, retail and travel, have continued to see softness due to high interest rates and inflationary pressures dampening consumer spending on big-ticket items. Pharmaceuticals, telecom and professional services continue to outperform other ad categories.

Key highlights from the report include:

• TV stations’ core local and national ad revenue is expected to decline slightly this year by 0.3% to $17.58 billion, with local spot up 1.5% and national spot down 4.5%, while digital could climb 3.0%.
• With the influx of $4.09 billion in political ads in a presidential election year, total TV-station ad revenues are expected to grow 14.1% to $24.95 billion.
• TV-station ad revenue over the next five years is projected at a negative 2.1% compound annual growth rate (CAGR), hitting a high of $25.57 billion in 2028, and then dipping 12.5% to $22.39 billion in the 2029 nonelection year. This five-year CAGR is lower than the 2023 outlook, given that it starts in a presidential election and Summer Olympics year in 2024 and ends in 2029, a nonelection year.
• Over the 2024–2029 projection period, the core national spot ad market for TV stations is expected to decline by a CAGR of 5%, with local spot up 1.5% CAGR, while the ebbs and flows of political ad spending in election years are reflected in the peaks and valleys of total TV station ad revenue.
• The radio station industry’s five-year ad outlook, driven more by the local market and less by political ad uptick, is expected to decline 3.7% in 2024 to $11.24 billion, excluding network and off-air revenue.
• As radio advertising continues to shift to streaming audio and podcasting alternatives, S&P expects a 5% CAGR decline in national spot and a 3.6% CAGR in local spot, as digital ad growth of 5.9% CAGR offsets larger declines with total radio ad revenue contracting to $10.08 billion by the end of the projection period in 2029.

NEW YORK—S&P Global Ratings has updated its U.S. pay-TV video subscriber forecast in the wake of the two largest U.S. cable companies, Comcast Corp. and Charter Communications Inc., reporting aggregate residential video subscriber losses for the first quarter of 2023 that were significantly higher than 1Q 2022 and well ahead of S&P Global Ratings' forecast.

"We expect the rate of overall pay-TV subscriber losses in 2023 will modestly increase from 2022's 7.0% decline," said Naveen Sarma, an analyst with S&P Global Ratings. "Legacy pay-TV subscriber declines, which includes cable, telco and satellite, will likely reach 12.4%, somewhat tempered by 10.4% growth of virtual pay-TV video subscribers. Virtual subscriber growth will benefit significantly from the NFL Sunday Ticket broadcast contract moving from DirecTV to Alphabet’s YouTube TV service."

S&P Global Ratings views the rate of cord-cutting as a credit negative for the entire TV media sector, although the degree varies by subsector, with regional sports networks and children's and premium cable networks being most vulnerable to cord-cutting. 

"The ultimate impact to individual companies' operating and credit metrics depends on the entity," said Sarma, "because most large media companies have diverse business operations, and their streaming services benefit from the decline in legacy television."

In Q1, 2023 Comcast said it lost 614,000 video subscribers during the quarter, an increase from the 444,000 it reported in Q4 2022.

Charter meanwhile reported losing 815,000 subs in the first quarter, a 5.2% decline. 

Pay TV providers, including cable, satellite and vMVPD companies representing 92% of the market, lost nearly 5.9 million net video subscribers in 2022, compared to a pro forma loss of about 4.7 million in 2021 according to Leichtman Research Group

NEW YORK—Consumer holiday spending is likely to slow this year, after a huge surge in pent-up demand and revenge spending, combined with pandemic-era government assistance programs, lifted spending through the 2021 holiday season, new data from S&P Global Market Intelligence finds.

The S&P survey of 1,678 U.S. consumers found that 7% of respondents are planning to spend more for the holidays year over year, versus 26% saying they will spend less and 66% saying they will spend roughly the same amount.

S&P Global Market Intelligence's annual Macroeconomic Outlook: Consumer Spending, Holiday Spending Preview also shows a disparity between lower-income households (making less than $50K per year), and higher-income households that bring in more than $100K per year. Higher-income households (net +6) are showing a positive outlook while lower-income households (net -29) are showing a big pullback this holiday.

The survey reflects ongoing worries about the economy, which has in turn impacted TV and digital advertising. 

The survey also highlights some bad news for broadcasters and media outlets dependent on retail advertising, with consumers saying they planning to shift more spending to online retailers like Amazon. 

Key survey highlights include: 

• Lower-income households hit hardest: An increased cost of living is affecting everyone, but it has a disproportionate impact on lower-income households. 
• Respondents rank inflation and energy prices as the top economic threats to personal finances overall, with greater concern among lower-income households (57% said inflation, 33% energy prices) than higher-income ones (38% said inflation, 26% energy prices).
• To keep up with rising costs, lower-income households plan to increase spending on nondiscretionary items, with groceries, energy/utilities and housing taking the largest chunks of their budgets.
• To afford the rising cost of necessities, lower-income households plan to decrease spending on discretionary items, with travel/vacation, movie theaters and restaurants taking the biggest cuts.
• Higher-income households plan to increase spending on both non-discretionary and discretionary items.
• Importantly, nondiscretionary items take up less of their household budgets, allowing them to spend more on travel, restaurants, and consumer electronics, in addition to groceries and energy/utilities.
• Consumers plan more online shopping: The adoption of online shopping channels looks to continue this holiday season as 43% of respondents say it is their preferred way to shop.
• 31% of respondents indicate they plan to spend more online than in 2021, with Gen Z (52%) and Millennials (46%) leading the charge.
• 17% say they plan to spend more in-store. While Baby Boomers (22%) stand out as the most likely to return to in-store shopping, all other generational groups are hovering at 14%-15%, showing there is a consistent segment of consumers returning to in-store shopping that cuts across age groups.

NEW YORK—After topping 1 billion for the first time in 2021, a new S&P Global Market Intelligence analysis is predicting that total connected video devices in the U.S. will top 1.1 billion by 2026 and that the number of smart TVs will grow from 208.5 million in 2022 to 224.8 million in 2023 and 274.2 million by 2026. 

The data highlights just how much U.S. consumers have embraced the streaming revolution, with the U.S. installed base for internet-connected video devices on course to rise at a 2.3% compound annual growth rate from 2021 through 2026, according to a new S&P Global Market Intelligence analysis released ahead of the holiday shopping season.

But the forecast anticipates a relatively stable 8.5 devices per broadband household throughout the forecast, indicating that homes have reached a saturation point for streaming video devices, the researcher noted.

The report also predicts that the installed base for streaming media players will decline from 37.6 million in 2022 to 24.3 million but that streaming media sticks installed in U.S. homes will increase from 78.4 million in 2022 to 103.2 million in 2026. 

Other key highlights include: 

• Of the devices in the analysis, smart TVs have the highest growth potential as vendors and end users recognize the increasingly central role streaming apps play in the way people consume content.
• Subscription services have served the streaming video segment well so far, but the wide device universe outlined in this report indicates there is a path to further monetization through ad-supported models.

On the eve of the 2022 FIFA World Cup taking place in Qatar, the worldwide TV business is poised to be among the biggest beneficiaries of the estimated $6.5 billion generated during the month-long event that starts Nov. 20.

That’s the consensus of S&P Global Market Intelligence, which issued a report in advance of the quadrennial sporting event, which is expected to draw an estimated 5 billion global audience across all platforms, with coverage of the 32 teams competition broadcast to 219 markets worldwide. 

The $6.5 billion revenue estimate is a record, surpassing all previous tournaments and at four times the figure seen in Korea and Japan in 2002, S&P said. In its analysis of the last complete four-year World Cup cycle that led up to Russia 2018, just under half of FIFA revenue came from broadcasting rights fees and an additional 26% came from marketing rights with sponsors signing contracts to associate with the event, according to S&P.

One of the advantages of holding the World Cup at the end of the year (Qatar’s brutal summers didn’t allow for the event to be held in its usual summer time slot) is that the fourth quarter is a particularly lucrative time for advertising. 

“The fourth quarter traditionally outperforms all other quarters across most markets as major campaigns target the holiday period when high levels of consumer goods transactions occur,” S&P said.  

Although the event has been sold to pay-TV and free-to-air channels worldwide, some markets, particularly those in Europe, have passed legislation to ensure that the games in a home nation are available free to air, a consideration when estimating TV ad revenues. Time zones are another consideration: with Qatar 8 hours ahead of the U.S. east coast, this means live coverage of the U.S.-England match on Nov. 25 will take place in the morning, whereas in the U.K., it will be in primetime (7 p.m.)

“This scheduling influences viewing levels and consumption at a platform level as many will opt to watch on a mobile device with the game taking place during work hours,” S&P said.

S&P concluded: “Overall, television is the largest beneficiary during the World Cup, but interactive experiences and mobile viewing mean that ad budgets will trickle down to online video and social media as well. According to Magna Global's June 2022 Global Ad Forecasts, cyclical events, which include the U.S. midterm elections and the World Cup, have boosted projected year-over-year global advertising growth for TV alone to 3.9%, from 2% in their absence. 

“However, their absence in 2023 means linear TV advertising will decline year over year by 3.7% globally. Global advertising expenditure will naturally slow down in 2023 following a year of cyclical events, economic turmoil and declining GDP performance.”

NEW YORK—Broadband subscriptions worldwide are expected to hit 1.13 billion by 2023, exceeding the 1.09 billion traditional pay TV subscribers for the first time, according to a report from S&P Global Market Intelligence report.

The newly published "2023 Technology, Media and Telecommunications (TMT) Industry Outlook," part of S&P Global Market Intelligence’s Big Picture 2023 Outlook Report Series, focuses on the market future of the metaverse in gaming and the enterprise, datacenter sustainability amid a worsening energy crisis, and the rise of fintech as a service. The report also explores video streaming competition and broadband transformation as forces of disruption in 2023.

The fact that broadband subscriptions will exceed pay-TV subscriptions has wide implications for the future of media, S&P says, which notes that gaming technology will be the driving force behind the metaverse’s evolution in the near term as augmented reality (AR) and virtual reality (VR) hardware enables users to engage in virtual worlds in and outside of work. 

AR and VR device adoption will grow steadily over the next five years as big tech companies underline the hardware's potential as a conduit to the metaverse, S&P said. As of the end of 2021, the researcher estimates there were 28.5 million AR/VR headsets installed worldwide across consumer and commercial settings, and forecasts that base to grow to 73.6 million by 2026.

"The foundational shift of the global economy to a digital footing—a shift that has been underway for over a decade and accelerated during the pandemic—continues. This is creating enormous opportunities for new value creation and disruption,” said Eric Hanselman, Chief Research Analyst for TMT at S&P Global Market Intelligence.

For traditional TV, rising inflation and cost of living crises may force some consumers to pare back streaming subscriptions, which in turn could prompt the pack chasing Netflix and Disney to focus on profitability instead of scale, S&P said. By 2030, the researcher predicted that global pay TV penetration will fall to 51.2% of residential households, from 57.7% in 2021.

 NEW YORK—While economic worries have slowed deal making in the media sector, merger and acquisition activity in the hot video game industry continues at a record pace with two billion-dollar deals in June pushing the year's total gross transaction value of M&A to $102.21 billion, according to a new analysis from Kagan, a media research group within S&P Global Market Intelligence. 

Neil Barbour, the lead analyst on the new Kagan report noted that large M&A activity in the video game sector in 2022 reflected the industry's status as a revenue powerhouse as well as one of emerging growth opportunities. In addition, cloud gaming has the potential to grow console-style gaming's user base while in-game purchases will play a major role in metaverse development, Kagan reported. 

June was the second-largest month for M&A so far in 2022 ($3.40 billion in total), but it paled in comparison to the blockbuster deals announced in January whose value totaled $97.20 billion, Kagan said. 

NEW YORK—To predict that pay-TV subscribers numbers will continue to drop as streaming services and other direct-to-consumer services entice people to cut the cord is not a reach, but S&P Global Marketing Intelligence takes it a step further saying that the loss of pay-TV over the next few years will negatively impact the U.S. TV sector’s credit quality.

The rate of pay-TV subscription loses, while still worse than 2019 (7.3%), slowed in 2020 (7.9%), thanks in large part to a dip in the second half of 2020. However, S&P estimates subscription losses will return to the levels they were in the first half of 2020.

The cable sector is projected to see a loss rate of 6.6% of its subscriptions in 2021, which is up from 4.6% in 2020. Larger cable operators are seeing a two point increase from 3.8% to 5.8% year-over-year. Midsize (9% to 10%) and small operators (actually seeing a marginally  smaller rate of loss, from 10.8% to 10.5%) will not move the needle as much. All of those numbers are expected to remain steady into 2022.

S&P believes that this increased pace is likely to continue because the cable sector is “increasingly indifferent as to whether unprofitable customers get their video service from cable companies or a third-party service.”

Satellite’s rate of losses are expected to decrease, according to S&P, having been at 11.2% in 2020 and a projection of 10.1% in 2021 and 10% in 2022. It credits Dish’s focus on key rural subscribers, but S&P questions the long-term sustainability of this trend. Things like rate increases and churn could impact it as life normalizes.

DirecTV, meanwhile, which plays in more urban and suburban markets, has not leveled off as S&P had originally thought it might, maintaining its 15% pace of subscriber loss.

Then there’s Telco. Despite several Telcos offering cloud-based TV services, S&P estimates that its rate of subscribers losses will jump from 13.7% in 2021 to more than 38% in 2022, as many companies could be content to let their video customers churn over the next few years.

One bright spot for pay-TV in recent years has been the emergence of virtual pay-TV entrants, like YouTube TV and Sling TV. Still, S&P does not see these vMVPD services as long-term solutions for pay-TV. When first launched, many of these services offered low-priced, slimmed down offerings, but they are growing to become more like traditional pay-TV packages and the prices are starting to rise in reflection of that; i.e., YouTube TV’s price hike the last couple years.

These services should be able to continue growing over the next few years, however, because they do not require any equipment fees or contracts, S&P says. They do though have a greater monthly churn and their revenue streams are more volatile because of this, as well as the fact that some people sign up seasonally depending on things like sports.

Pay-TV’s decline could accelerate if sports make a stronger push toward streaming. The NFL, as part of its most recent broadcast rights deal, gave exclusive programming to Amazon and networks like CBS (Paramount+), ESPN (ESPN+) and NBC (Peacock) will offer some of their NFL games on the streaming platforms. If or when more sports follow suit, it could hasten the cutting of traditional linear TV subscriptions.

Also, the expansion of broadband into more rural areas will help make streaming options more viable for those markets, also contributing to greater adoption of streaming services.

While certain broadcast TV elements like local TV and broadcast networks will help to keep traditional pay-TV key to many consumers, and can differ depending on the broadcast sector, the current rate of cord-cutting is an overall negative for the entire TV media sector’s credit quality, S&P concludes.

NEW YORK—Cord-cutters aren’t that interested in hopping back on the cable, satellite bandwagon, even as the coronavirus pandemic keeps people at home and consuming more content, according to a new S&P Global Market Intelligence survey.

Of the 1,000 participants in the survey, which was conducted from March 27-29, 430 said they did not currently have a traditional multichannel service. Of those, 59% said they were unlikely to start paying again for such a service; 25% were somewhat likely and 17% were very likely.

When it comes to key media services, S&P found that streaming video and cable TV were the ones that respondents deemed most expendable. Between streaming, cable TV, mobile phone and broadband, if something needed to be cut first, 37% said they would drop streaming, while 28% said cable TV. Internet came in at 20% and mobile phones were at 14%.

Live sports, a big driver of TV viewership, is on hold right now as essentially all professional and collegiate leagues have suspended their seasons. But the lack of available sports is not stopping sports fans’ viewing trends. While 61% of respondents are watching more video during the crisis, about half reported that they are still watching live TV sans sports, though about 24% are enjoying rebroadcasts of old games (20% are checking the archives of digital sports services). Only a quarter of fans said they would watch nothing in place of live sports.

Unsurprisingly, streaming services are seeing a boost in usage as well as some in signups. S&P found that nearly two in 10 of respondents expected to add a streaming service through June; one in 10 were planning on dropping one. Traditional Hulu is leading in new additions at 6%, followed by Netflix, Disney+ and Amazon Prime Video.

For those using AVOD sites, 20% were most likely to try network TV websites. Crackle (18%), The Roku Channel (17%), Facebook Watch (17%) and Pluto TV (14%) were the next most popular.

PLUS: OTT Plays Spike During Coronavirus Outbreak

Additional findings by S&P included the slow adoption rate (3%) of Netflix’s new “Netflix Party” feature, which enables synchronized video playback and virtual group chats. Also, with movie studios releasing new films directly to the home as theaters are shutdown, 29% said they’d be willing to pay $20 for new titles; homes with children were more interested (50%) than adult-only homes.

For more information on S&P’s survey, visit www.spglobal.com.

MONTEREY, CALIF.—The first quarter of 2017 saw the largest radio transaction since 2006 with announcement of a planned of Entercom Communications Corp and CBS Radio. The $2.5 billion deal wound up making up 90 percent of U.S. broadcast station mergers and acquisitions for Q1 2017, according to S&P Global Market Intelligence, which totaled $2.79 billion for both radio and TV.

The Entercom/CBS deal will see CBS Radio spin off its 29 AM and 88 FM stations to Entercom.

The rest of radios mergers & acquisitions accounted for $92.9 million between 61 AM stations, 60 FM stations and 44 low-power stations. Second behind the Entercom/CBS deal was Starboard Media Foundation’s acquisition of Immaculate Heart Radio for an estimated $30 million.

The TV market registered $167.3 million mergers and acquisitions in the first quarter. The largest deal was from Gray Television, acquiring the market leaders in Gainseville, Fla., and Bangor, Maine, for $85 million paid to Diversified Broadcasting Inc. and Community Broadcasting Service. Meredith Corp. paid Time Warner $70 million for the license of Indie WPCH-TV in Atlanta, which was the largest single station deal since 2015, per S&P.