Multichannel operators are struggling to come up with a video package which is appealing to consumers, balancing popular content with a low price point. The task is easier said than done. Although we cover almost 200 basic cable networks, the top 25 networks comprise about two-thirds of license fees, with Walt Disney Co.'s ESPN at the top, generating more than $7 billion in affiliate fees, or 18.3% of the total.
TNT, the number 2 channel, is not even close at $2.57 billion. Five other channels pull in more than $1 billion per year in affiliate revenue.
By comparison, the bottom 25 in affiliate fees garner only $4 million per year in license fees on average. These include indies like Cars.TV and ShortsTV, as well as a plethora of foreign language channels that are often not in the basic digital package.
Click here for the history of affiliate fees by network going all the way back to 1989.
As the graphic shows, the top 10 networks comprise almost half of license fees: The top 20 come in at 62.1%, while the top 50 weigh in at 83.5%. That leaves just 16.5% of the pie for the remaining 140 basic cable networks that charge a license fee.
As the graphic shows, there were only 20 channels pulling in all license fees in 1989. By 1998, as more networks launched, this dropped to 82.4%. By 2008, this had dropped to 63.9%, and we appear to be stalled out at close to that, with 62.1% in 2018.
This is due to the dominance of these top networks, which continue to increase their license fee per sub well above inflation, while newcomers are able to get very nominal license fees — if they are able to get a license fee at all.