The halcyon days are over for cable television. A new era has begun.

Cable household penetration is flattening out and ratings, only recently soaring, are trending down in most demographics. And that's against rising competition for ad dollars from newer media, led by the internet.

In this new era, cable TV will come to resemble its older competitors, such as broadcast TV. It will see only modest growth in its share of ad spending. And those dollars will be hard-fought, with cable network pitted against cable network for a slice.

Much of this is already taking place. It will only accelerate in this spring’s upfront ad market and in years to come.

Ad spending in last year’s $6.5 billion upfront was flat to the prior year. Moreover, TNS Media Intelligence reports that expenditures in the first three quarters of 2006 were up only 3.3 percent from the year-earlier period, compared to 4 percent for all media.

Cable TV’s slowdown will only grow more pronounced, say media buyers and analysts.

“I believe the growth in cable has reached maturity, so we will see a little growth year-over-year going forward,” observes Erik Brannon, associate analyst with Kagan Research.

But the cause is not the slowing of cable penetration per se, though that's taken place as cable systems across the country extend their systems to saturation. Rather Brannon credits the internet.

“Had the internet not become a significant factor in advertising, the significant growth in cable would have continued. The health of cable is not in doubt but it isn’t going to grow like it used to.”

In years past, when cable TV was the hot new medium, ad spending grew by double-digit percentages. That occurred when consumers were still signing up for cable TV, leading to penetration growth in double-digits while viewers migrated away from broadcast networks.

Posting solid growth from a small base of subscribers and ad dollars was easy.

That era is over. About 86 percent of homes received cable networks through cable or satellite services at the end of last year, up only 2 percentage points since 2001, according to Nielsen Media Research.

“The people who don’t have cable today have been referred to as the cable-nevers, and they’ve been called that for a reason,” says Brian Wieser, vice president and director of industry analysis at Magna. “It’s hard to imagine there could be much more growth.”

Moreover, cable TV isn’t chipping away at the broadcast networks as it once did.

Cable TV’s household rating in fourth quarter dipped 1 percent from the year-earlier period, according to a Magna Global analysis of Nielsen ratings. Among people 2 years and older, cable was also down 1 percent, while it was slightly up in the 18-34 demographic and flat among 18-49s. Ratings were down in the 25-54 demographic and among kids and teens.

In a Media Life survey last month, 62 percent of respondents thought cable TV would plateau this year while only 20 percent thought cable TV would rebound.

It’s still premature to make predictions about this year’s upfront but buyers and analysts say cable TV will struggle to see an increase in spending. Most say there is an over-supply of inventory, meaning all but the most-in-demand networks will have little leverage to raise prices.

With spending expected to be flat or only slightly up, competition between the networks will become more intense. There will be less selling against broadcast, more selling against one another.

“The networks are already competitive with each other and they will continue to be,” says John Rash, senior vice president and director of media negotiations at Campbell Mithun.

TNS Media Intelligence this week predicted modest growth for cable TV in 2007, up 4.7 percent. That is well behind increases for hotter media like the internet and outdoor and only slightly better than the outlook for troubled media such as radio.

“It’s too early to tell about the upfront. Much depends on specific programming strategies by individual networks and, collectively, all the networks,” says Rash. “But it is already, and it will continue to be a highly competitive marketplace.”