CATV Will Meet DBS Challenge, Despite Dramatic Upturn In 2000 For Satellite Television Providers, According To ABI

While cable television (CATV) is seen as a secondary choice to direct broadcast satellite (DBS) for new subscribers, CATV is still holding its own despite dire predictions. However, 2000 will represent a significant but brief shift as new DBS subscribers will be more than double new CATV subscribers, according to a new report from Allied Business Intelligence (ABI). According to ""CATV Infrastructure 2000: US Equipment Markets And System Trends,"" an annual research study by ABI, CATV added two million subscribers in the US in 1999 and will add another two million in 2000. DBS added 2.7 million in 1999 and will add 4.5 million in 2000. However, DBS subscribership will never be on a fifty-fifty basis with cable. Even on a new subscriber basis, cable will exceed DBS from 2002 onwards as the initial effect of local channels is spent. Despite the DBS segment gain, the DBS industry is still new enough to have a relatively low subscriber count - just over 11 million at the end of 1999, versus cable television's 71 million. It has suffered from the inability to offer local channels to the customer. This forced the customer to rely on broadcast antennas or even the cable company to get those local channels. Nearly 1.6 million households subscribed to both DBS and CATV in 1999, according to ABI's findings. This changes in 2000. Recent legislation and technological advances will allow DBS operators to offer local channels in many major markets. While this will increase DBS's attractiveness, it does not remove all of cable's advantages. For one, cable already has a large customer base. These customers must make an effort to switch to DBS, while no effort is necessary to keep the existing cable services. The existing subscriber base also gives to cable operators the databases of names and potential revenues for marketing. Receiving CATV is also easier, as cable works on any TV hooked up to the coaxial cable, while DBS requires additional equipment for each additional television. Cable television is also making itself more attractive through network upgrades as coaxial cable is being upgraded to offer additional services, such as high-speed data access, which are discounted when bundled with CATV service. ""CATV Infrastructure 2000"" covers the US CATV infrastructure equipment markets and the trends that affect them. Forecasts range from numbers of subscribers for various services to actual equipment shipments, and much in between, forecast annually through 2005. The market is covered from the equipment and vendor standpoint rather than the programming and viewer standpoint. Allied Business Intelligence, Inc. an Oyster Bay, NY-based technology research think tank publishing strategic research on the broadband, wireless, electronics, automation, energy and transportation industries. can be found at www.alliedworld.com or by phone at 516 624 3113.