Kagan reports Cable telecos still a money maker...
Kagan Research reports that despite a slight erosion of Cable TV's penetration rate over the next decade in the face of satellite TV, "cable revenue from residential subscribers is expected to grow from $68.2 billion in 2006 to $120 billion in 2016." This expansion is largely due to the growth of broadband Internet, telephony and VOD subs as well as the upswing in local advertising dollars.
According to Kagan:
"That doesn't include additional revenue from business customers (see Oct. 19 Kagan INSIGHTS free at kagan.com). The gains are expected despite penetration for cable TV video services as a percentage of all residential TV households slipping slightly from 58.6% this year."
More Excerpts:
"Cable telephony and high-speed cable modems get the most attention among add-on cable services. But the list is much longer: digital video recorders, high definition channels, video on demand and interactive TV."
"'Cable thrived despite stiff competition from satellite TV for a decade,' notes Robin Flynn, senior analyst with Kagan Research. 'Now telcos have arrived too, but cable is bulked up and remains well positioned. Competition increases, but so does the revenue pie with these additional services.'"
"Buoyed by the growing service menu, average revenue per (cable subscriber) unit including all services is expected to climb from $87.04 per month in 2006 to well over $140 by 2016. While consumers pay more, they also get more services. And not all of that ARPU increase comes from residential subscribers. Cable TV's local advertising—a component of ARPU—is fast growing. Kagan databook Cable Futurecast 2006 forecasts net local cable ad billings will increase from nearly $4 bil. this year to $9.6 bil. by 2015."
"Even the slight decline in cable residential penetration forecast for the next decade is not dire. The number of total TV households is growing, so cable's headcount will still rise slightly. 'We estimates multiple system cable operators are on track to recapture a little more than 160K basic subs in '06, a trend we expect to continue in the coming years,' notes Cable TV Investor: Deals & Finance ."
