Media companies worried about their ability to continue collecting increasingly fat affiliate fees from cable and satellite distributors can rest easy.
According to a Wall Street research memo published Monday, the existing pay TV model will continue to spin off high single-digit program licensing fee increases for these conglomerates for the next dozen years or so.
Over time, however, large media companies buttressed with revenues from myriad smaller cable channels will see their models start to falter, as the pay TV business moves inexorably away from program bundling to a la carte selection.
Lazard Capital analyst Barton Crockett’s memo suggests there is enough tolerance in the margins of pay TV service providers, as well in the personal finance budgets of cable and satellite subscribers, to maintain the pay TV model until at least 2024.
In the graphic above, Lazard factors in 8 percent annual program licensing fee increases and determines…
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