A recent CAB analysis of cable programming from 2003 to 2008 shows just how dramatically cable networks have shifted away from the old model of acquired programming, cable's former bread and butter and still a strong source of solid ratings for cable groups such as Turner, NBC Universal and Viacom's TV Land and Nick at Nite.
Original programming surges
The CAB found that an average week of cable programming in April 2003 consisted of 59% original programming, or 741 shows, and 41% acquired programming, or 517 shows. The number of original shows during an average week in April 2008 nearly doubled, with 1,407 original shows, or 67% of the whole schedule, with 688 acquired programs.
So not only did the percentage of original programs increase greatly, but the total number of original programs in any given week nearly doubled from 1,258 in 2003 to 2,095 this year.
CAB CEO Sean Cunningham said cable programmers have always tried to strike an optimal balance of acquired and original content, but advertisers and agencies, like viewers, are starting to recognize the original content as adding more value to the media mix. "The top advertisers already get that cable's got a co-lead role in their TV plans, but I think what's shining a light on the growth of iconic programming makes it all a stronger play when they are getting their sales force pumped up for the coverage and the overall power of the brand."
The CAB study coincides with a new SNL Kagan study, "Economics of Basic Cable Networks," which reports that cable ad revenue increased 10.5% to $19 billion in 2007, accounting for half of the industry's total revenue of $38 billion. Double-digit ad growth is expected to continue this year, despite an anticipated economic slowdown in the third and fourth quarters, with ad revenue projected to increase 10.4% for all of 2008. Only in 2009 will cable start to see its year-over-year growth slow down, with SNL Kagan predicting a 4.7% increase in ad revenues for that year.
"This year's weak economy has resulted in extremely volatile ad markets, with major advertisers scrambling to allocate budgets where they will get the most bang for the buck," Derek Baine, senior analyst for SNL Kagan, said in a statement.
Cable is also coming out of a strong upfront, finishing 10% higher than 2007's $6.9 billion total, and companies such as Time Warner's Turner Networks and Walt Disney's ESPN posted strong ad revenue gains in their recent second-quarter earnings reports. But despite a strong first two quarters, Mr. Baine expects to see some increasingly negative numbers in the second half of 2008.
Stealing viewers from broadcast
That won't stop the ratings momentum currently enjoyed by cable, which has continued to lure away viewers from broadcast networks since the writers strike. During the first 22 weeks of 2008, the number of adults aged 18 to 49 who watched cable TV accounted for 47% of that demo's share of TV viewing, doubling its 23% share from the same time period in 2007.
"It is clear from the trends that ad-supported cable's considerable investment in high-quality, relevant and diverse programming has paid huge dividends," Mr. Cunningham said.