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Broadband Ups Cable Industry Forecast

11 Aug, 2016 By: Erik Gruenwedel

In an era of cord-cutting and over-the-top video, cable operators would appear to be on a sinking ship. Not so, according to new data from SNL Kagen Research, which says the industry’s broadband advantage and bundling will enhance revenue through 2026.

Residential revenue is projected to increase from $108.4 billion in 2016 to $117.7 billion in 2026. Contributions from commercial services will help push total revenue from $130.6 billion in 2016 to $141 billion in 2026, or $10.42 billion over the 10-year period.

Combining basic cable and advanced services, SNL Kagan anticipates total revenue generated from residential video services to fall 0.5% over the next 10 years, totaling $55 billion annually in 2026.

While video subscriptions continue to decline, viewers opting for OTT video still need high-speed Internet. And cable operators are the main sources for broadband.

Broadband subscriptions are expected to swell by more than 8 million over the next 10 years, reaching 71 million — more than 1.6 times the number of video subscriptions.

Basic video subscriptions are projected to drop by an annual compounded growth (CAGR) rate of 1.5% to 45.4 million by 2026, slower than the 1.7% CAGR in last year’s 10-year projection.

“Like many industries, cable isn’t immune to shifting preferences, but continued growth in broadband may propel revenue growth on both the residential and commercial end,” Tony Lenoir and Ian Olgeirson, SNL Kagan researchers said in a statement. “Despite ongoing declines in video, the next 10 years look pretty good for this sector.”

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