Premium cable channels thrive in recession
recently reported a trend that surprised me: Premium cable channels such as HBO are thriving, rather than suffering, due to the recession. I'd expected the opposite, assuming that the cable bill would be one of the first things people threw under the bus when trimming expenses.
The author, Rory Maher, reports that profits at both HBO and Cinemax were up by more than 10% in the last quarter of 2008, reflecting a new record number of subscribers. More than a third of all 111 million U.S. households now subscribe to one or more of these services.
Also experiencing growth in the same time period were Showtime, up 6%, and Starz, which increased revenue by 8%.
I was interested to learn that, according to Maher, HBO and Showtime gross around $6.25 per subscriber per month. The balance of the subscriber payment is apportioned out to distributors such as local cable companies.
Putting this information together with a recent WalletPop report about the boom in the movie industry and I have to conclude that the recession has deepened our desire to forget the dire news. Instead, we prefer to sink into the world of cinema, where villains wear black, heroes show their quality, and problems are solved before the final credits roll.
